IMPACT OF FOREIGN EXCHANGE RATE POLICY AND GROSS FIXED CAPITAL FORMATION ON GROWTH OF ECONOMIC IN NIGERIA

IMPACT OF FOREIGN EXCHANGE RATE POLICY AND GROSS FIXED CAPITAL FORMATION ON GROWTH OF ECONOMIC IN NIGERIA

Author by Dr. Samuel Olaoye

Journal/Publisher: Interciencia

Volume/Edition: 45

Language: English

Pages: 41 - 60

Abstract

This study examines the impact of foreign exchange rate policy and gross fixed capital formationon growth of economic in Nigeria from 1989-2017. The Secondary data used for this study were sourced from the Statistical Bulletin issued by Central Bank of Nigeria. Linear regression statistical model otherwise known as Ordinary Least Square (OLS) was used to analyze the collected data. The study revealed that there is a positive insignificant impact of foreign exchange rate policy on growth of economic in Nigeria. However, the gross fixed capital formation has positive significant impact on the Nigerian economic growth. The finding of the study also indicates that both foreign exchange and gross fixed capital formation explain about
97% of the variation in the Nigerian economic growth. This study has policy implication. The study recommends that to reduce pressure on foreign exchange; government must encourage the consumption of consumer items being produced locally rather than the imported ones from foreign countries. The government also needs to enact favourable business rules and regulations that would encourage the investors to invest in Nigerian economy. This would increase the capital inflows thus provides the needed capital for the expansion of the Nigerian economy.


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