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Foreign Reserves and Economic Growth in Nigeria

NURUDEEN, Yahaya, PROF AMADI, W, Kingsley, and Mamman Andekujwo, Baajon

Abstract

This study sought to examine the impact of foreign reserves on the growth of the Nigerian economy. Economic growth which is the dependent variable is proxy by Gross Domestic Product (GDP), while foreign reserve is the independent variable. Secondary data were used for this study and were collected from Central Bank of Nigeria Statistical Bulletin for the period 1986-2024. Auto Regressive Distributed Lag (ARDL) Technique was employed for analysis. The result of the study shows that there is a positive and significant relationship between foreign reserves and Gross Domestic Product in Nigeria. This study therefore concludes that foreign reserves in Nigeria contributed positively and significantly to the growth of the Nigerian economy within the period of study. The study therefore recommends that there should be prudent management of the Nigerian foreign reserves to ensure more growth while government should also put in place policies that will enhance increased accumulation of external reserves. Also, government should make regulations in which some percentage of her monthly revenue should be appropriated to boost her foreign reserve in Nigeria.

Keywords

Foreign ReserveExport EarningsARDLFDI and Exchange

References

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