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Impact of Money Supply and Exchange Rate on Economic Growth in Nigeria

In: Impacting Society Positively Through Technology in Accounting and Business Processes

Author

Listed:
  • Azeez Adebanjo Wahab

    (Federal College of Education (Technical))

  • Michael Olajide Adelowotan

    (University of Johannesburg)

Abstract

The study examines the interplay between money supply, exchange rate, and economic growth in Nigeria over a period of 20 years. It sought to evaluate the extent to which the money supply affects gross domestic product and also, to find out the effect of exchange rate on gross domestic product in Nigeria. To achieve these objectives, a model was formulated, and an Autoregressive Distributed Lag (ARDL) Cointegration Technique was used as a method of analysis. The variables used in the study were further subjected to Bounds test and other econometric tests. The data were cointegrated at order 1(1) and order 1(0). The long-run relationship of the underlying variables is detected through the F-statistic (Wald test). The study revealed that exchange rate has positive and significant influence on the economic growth in Nigeria measured with LGDP. The result was not consistent with the negative a priori expectation. Also, the result obtained shows that the relationship between money supply and gross domestic product in Nigeria is positive but insignificant. The study, therefore, recommends that regulators should hand down regulations that control the supplies of money in the circulation and that government should put on policy implementation that will ensure the stability of naira value.

Suggested Citation

  • Azeez Adebanjo Wahab & Michael Olajide Adelowotan, 2025. "Impact of Money Supply and Exchange Rate on Economic Growth in Nigeria," Springer Proceedings in Business and Economics, in: Tankiso Moloi (ed.), Impacting Society Positively Through Technology in Accounting and Business Processes, pages 183-201, Springer.
    • Handle: RePEc:spr:prbchp:978-3-031-84885-8_9
    DOI: 10.1007/978-3-031-84885-8_9
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