مجلة بحوث الإدارة والاقتصاد
Volume 4, Numéro 2, Pages 25-44
2022-09-02
Trade Balance, Exchange Rate And Money Supply In Nigeria: Growth Implications And Lesson For African Countries
Authors : Osinusi Kunle Bankole . Lawal Nurudeen Abiodun . Bisiriyu Sodiq Olaide .
Abstract
The significance of trade in the development of nations made this study examined the impact of trade balance, exchange rate, and money supply on economic growth with reference to Nigeria economy and as a lesson for other African countries. The study relies on the Mundell-Fleming BOP model for its framework while the study used secondary time series data obtained from the Central Bank of Nigeria Statistical Bulletin from 1981 to 2020. The ARDL cointegration of the least square was adopted and our result showed a long-run relationship among trade balance, exchange rate, money supply, interest rate, inflation rate and economic growth in Nigeria. The study thus concluded that oil trade balance is the main driver of Nigeria economic growth and as a result, we suggested that to ensure economic growth in Nigeria and other African countries; the government should strategize on policies to develop trade in the non-oil sector; also the monetary authorities should formulate frameworks towards making money supply growth enhancer, and stabilization of the exchange rate for domestic countries to gain more from trade by enhancing the flow of credit to the real and exporting sector towards setting the economies on the track of expansion.
Keywords
Trade Balance ; Exchange Rate ; Money Supply ; Economic Growth ; Mundell-Fleming ; AutoRegressive Distributed Lag ARDL
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