Effect of Naira Devaluation on Entrepreneurial Development in Nigeria
Ejiofor, Ngozi Ukamaka PhD, Blessing, Chugo Idigo PhD
Abstract
Naira devaluation is a deliberate downward adjustment of the value of a country’s currency relative to another currency or standard currency (usually dollars). The main objective of the study is to investigate the effect of effect of naira devaluation on entrepreneurial development in Nigeria. Specifically, the study examines the effect of exchange rate on entrepreneurial development in Nigeria, assess the effect of interest rate on entrepreneurial development in Nigeria, investigate the effect of inflation rate on entrepreneurial development in Nigeria and examine the effect of export on entrepreneurial development in Nigeria. The data were analyzed with econometric techniques involving Augmented Dickey Fuller and Philip Perron tests for unit roots, Johansson technique for cointegration test for long run relationship and the Ordinary Least Square. The result of the study indicates that export has positive and significant effect on entrepreneurial development in Nigeria while inflation rate, interest rate and exchange rate has negative and insignificant effect on entrepreneurial development in Nigeria within the period under study. The study therefore concludes that naira devaluation has negative effect on entrepreneurial development in Nigeria and has not helped to improve economic growth and development in Nigeria. The study has shown that interest rate and exchange rate have negative effect on entrepreneurial development in Nigeria. This has negatively affected the entrepreneurial development in Nigeria and has in turn reduced the standard of living of average Nigerian citizen in Nigerian. The implication is that entrepreneurial development could have been sacrificed on the altar of unsustainable interest rate and exchange rate in Nigeria. Reiterating to the objectives and findings of the study, we recommend that to further sustain entrepreneurial development in Nigeria and to achieve other macroeconomic objectives of the
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