Monetary Policy on Economic Growth in Nigeria: An Empirical Investigation

Ofoniofoni Sueneme Bobkime; Prof. Priye Werigbelegha Andabai

doi:10.56201/ijefm.v11.no6.2026.pg175.190

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Monetary Policy on Economic Growth in Nigeria: An Empirical Investigation

Ofoniofoni Sueneme Bobkime, Prof. Priye Werigbelegha Andabai

Abstract

The study was design to fill the gap by investigating the impact of monetary policy on economic growth in Nigeria. The study used time series secondary data sourced from Central Bank of Nigeria statistical Bulletin from 1986-2024. The study applied monetary policy variables which include monetary policy rate, money supply, inflation rate, exchange rate and cash reserve ratio against economic growth proxy by gross domestic product growth rate. The study used descriptive statistic to test if the series are normally distributed. The Jarque-Bera probability test shows that the series are normally distributed at 5% level of significant. The study used Johansen Cointegration test, the test report that there is an evidence of co-integration among the variables. The study adopted error correction model. The error correction model shows that monetary policy rate has a positive but insignificant impact on gross domestic product growth rate in Nigeria. Money supply has a negative and insignificant impact on gross domestic product growth rate in Nigeria. Similarly, inflation rate has a negative and insignificant impact on gross domestic product growth rate in Nigeria. While exchange rate has a positive and insignificant impact on gross domestic product growth rate in Nigeria. On the contrary, cash reserve ratio has a negative and insignificant impact on gross domestic product growth rate in Nigeria. The study concludes that monetary policy tools were not useful in controlling economic growth. The monetary policy authority should therefore pursue an expansionary monetary policy framework; keep the monetary policy rate lower, in single digit, which will lower the cost of funds leading to a more productive business environment.

Keywords

Monetary PolicyEconomic GrowthTime SeriesJarque-BeraCash Reserve Ratio

References

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Monetary Policy on Economic Growth in Nigeria: An Empirical Investigation

Abstract

Keywords

References

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