Economic Growth stimulant in Nigeria: Components and combined analysis

Abstract

Economic growth stimulus in developing countries such as Nigeria is still an important discussion in economics and business literature. This study sought to examine the stimulus of economic growth in Nigeria, analyzing components and combined effects. Secondary data were collected from the Central Bank of Nigeria Statistical Bulletin, which reported data between 1980 and 2019. To analyze the data collected, simple and multiple linear regression models were used. The findings revealed that four components—the exchange rate, money supply, interest rate, and export—were statistically significant in stimulating the growth of the economy. The inflation rate as a component was not statistically significant in creating favorable stimulation for economic growth. The combined effect of these factors showed a statistically significant effect on stimulating economic growth. Interest rate and inflation showed a negative relationship with real GDP (an indicator of economic growth), while the other three indicators showed a positive relationship. Therefore, we recommend that the government, firms, and individuals always consider actions that will reduce the negative effects of inflation and interest rates on the economy.