Empirical Investigation into the Long Run Macroeconomic Determinants of Economic Growth in Nigeria

International Journal of Economics and Management Studies

© 2021 by SSRG - IJEMS Journal

Volume 8 Issue 10

Year of Publication : 2021

Authors : Dr. Abdulhadi Ibrahim

10.14445/23939125/IJEMS-V8I10P102

How to Cite?

Dr. Abdulhadi Ibrahim, "Empirical Investigation into the Long Run Macroeconomic Determinants of Economic Growth in Nigeria," SSRG International Journal of Economics and Management Studies, vol. 8,  no. 10, pp. 8-17, 2021. Crossref, https://doi.org/10.14445/23939125/IJEMS-V8I10P102

Abstract:

The downward and unsustainable trends in economic growth in Nigeria has been a source of worry over the years not only for government but also policy makers and international communities. This paper was undertaken to empirically investigate the long run macroeconomic determinants of economic growth in Nigeria using annual time series data from 1981 to 2017. The data was sourced from the Central Bank of Nigeria (CBN) statistical bulletin, National Bureau of statistics (NBS), and World Development Index (WDI) from the World Bank data base. To attain the objectives of this study, the Autoregressive Distributed Lag (ARDL) Model was employed to examine the long run relationship between economic growth and its macroeconomic determinants and their influence on economic growth. Findings of the study reveal thatin the long run, the major macroeconomic factors driving the economic growthin Nigeria are human capital, external debt and budget deficits while physical capital and trade openness do not influence economic growth significantly. The study further found a positive relationship between real GDP per capita and human capital while external debt and budget deficits affect economic growth negatively in the long run. Physical capital and trade openness are both negative and statically insignificant in determining economic growth in Nigeria. Based on the findings, the study recommends the following among others; budgetary allocation to education should be increased, there is the need to put the external borrowing to productive sectors of the economy and to developing critical infrastructures, exports should be intensified through diversification in agriculture and manufacturing sectors and reduce importation of goods that can be produced at home more cheaply.

Keywords:

Economic Growth, Macroeconomic, Long Run, Nigeria, ARDL

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