IIARD International Institute of Academic Research and Development

IIARD INTERNATIONAL JOURNAL OF BANKING AND FINANCE RESEARCH (IJBFR )

E-ISSN 2695-1886
P-ISSN 2672-4979
VOL. 11 NO. 2 2025
DOI: 10.56201/ijbfr.vol.11.no2.2025.pg96.122

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Balance of Payments and Economic Growth in Nigeria

Dr Greatness U Oji

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Abstract

This study explored the effect of balance of payments on economic growth in Nigeria. The objectives of the study were to establish the connection between the balance of payments and economic growth. Secondary data were gathered from the Central Bank of Nigeria Statistical Bulletin. The Augmented Dickey-Fuller (ADF) test were used to test for stationarity, the results reveal that the variables were statistically at mixed order also the study found that there is cointegration using ARDL method. 99.8 per cent variation in gross domestic product in Nigeria were explained by variation in balance of payment variables. The results found that exceptional financing have positive and significant effect on economic growth, the variables added 0.02 per cent to gross domestic product, capital account have positive but no significant effect and added 0.003, net errors and commission have positive effect and added 0.003 while current account have negative and reduced 0.015 to gross domestic product. The study concludes that balance of payment effect variation in economic growth in Nigeria. The study recommends that both federal and state government should put in place policies that promote industrialization and domestic production in order to promote exportation. This may be done by formulating and implementing dynamic terms of trade and keeping trade openness rate below or at ceiling level in order to ensure economic growth, since capital account has positive effect on economic growth in Nigeria.

keywords:

Balance of Payments, Economic Growth, Nigeria

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