Effect of exchange rate volatility on economic growth in Nigeria (1986-2014)

Oloyede, John Adebayo; Fapetu, Oladapo

doi:10.1504/aajfa.2018.10015519

Cited by 8 publications

(7 citation statements)

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“…This is largely due to the premise that foreign exchange, exchange rate and the construction sector are in isolation. This finding of insignificant effect of FEPR on the construction sector is supported in the body of literature (see Adeniran et al, 2014;Fapetu & Oloyede, 2014;Okechukwu, 2017). However, Aksuyek and Yilmaz (2017) submitted that in recent times, the extreme change in foreign exchange rate have substantially affected construction organizations in their operations.…”

Section: Estimates For the Modelssupporting

confidence: 61%

Evaluating the Influence of Foreign Exchange Policy Regime on the Construction Sector in Nigeria

Saka

Moyanga

2023

INTREST

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In developing economies, foreign exchange policy regime (FEPR) play a critical role in the viability of all sectors of the economy. In Nigeria, the economy is dependent on foreign inputs from contracting services, technology, materials, expatriates, etc. Therefore, this study investigated the impact of FEPR on the performance of the construction sector in Nigeria. To achieve this goal, time series data was extracted from United Nations Statistics Division (UNSD) on the construction sector, gross domestic product (GDP) and FEPR for 50 years spanning from 1970 to 2019. The study uses econometric approach including tests of stationarity and co-integration as well as the generalized method of moment (GMM) to model the relationships between the variables. The study reveals that the 1986 FEPR reform had significant and negative effect on the construction sector output in Nigeria. This implies that the performance of the construction sector is affected by the state of the economy and government policy. This study proves that the foreign exchange policy regime does not significantly influence the construction industry during the period of review. It also ascertained that the development of the construction sector depends more on previous construction outputs and only altered due to oil export shock. Hence, this study recommends that sustainable construction development strategies should be implemented to eliminate construction sector challenges and reduce the effect of foreign exchange rate volatility on the construction sector. Finally, monetary and fiscal policies that can engender sustainable growth and development of the construction sector should be implemented.

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Section: Estimates For the Modelssupporting

confidence: 61%

Evaluating the Influence of Foreign Exchange Policy Regime on the Construction Sector in Nigeria

Saka

Moyanga

2023

INTREST

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“…Also, Chaudhry and Abdul (2014) modified Edwards (1985) by replacing unexpected money growth with broad money supply and added additional variables such as government consumption expenditure; terms of trade and net foreign aid. However, this study modified Khan-Knight (1981), Dada and Oyeranti (2012), Fapetu and Oloyede (2014) and Chaudhry and Abdul (2014) and integrated foreign reserve (FVN) in order to effectively investigate the impact of exchange rate variation on economic growth in Nigeria. The model one is specified in its functional form as: GDP = ƒ (EXR, GE, FDI, FVN, MS) 4 The equation 4 is further specified in a log linear form as: logGDPt = α0 + α1logEXRt + α2logTGEt + α3logFDIt + α4logFVNt + α5logMSt+ et 5 a priori expectation α1,> 0, while α2, α3, α4, and α5 > 0 where, GDP is gross domestic product.…”

Section: Methodology 31 Model Specificationmentioning

confidence: 99%

Exchange Rate And National Output Performances: The Implication On Nigeria’s Economy

Bernard Eze,

Augustina Nnenna,

Martin Ifeanyi

2024

Glo J. Soc. Sci.

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The study investigated the effect of exchange rate on economic growth in Nigeria using annual time series data from 1970 to 2021. The data were obtained from Statistical Bulletin published by the Central Bank of Nigeria 2021. The empirical studies reviewed had divergent views on the impact of exchange rate on economic growth in Nigeria. The study began with the test of unit root using Augmented Dickey-Fuller (ADF) and Philip-Peron (PP) unit root tests, followed by Johansen cointegration test, vector error correction model (VECM). The VECM indicated that exchange rate appreciation contracts output. The granger causality tests revealed that exchange rate and economic growth reinforce one another. However, based on these findings, it becomes imperative to build adequate foreign reserve to cushion-off trade shocks, promote import substitute industries, diversification of economy and enhance export oriented industries and reduction in cost of borrowing to enable domestic firms to benefit from the theoretical advantages of exchange rate variation. These measures promote the performances of macroeconomic variables in Nigeria.

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“…The research concluded that there is the need for the government to dump the floating exchange regime and adopt purchasing power parity which has been considered by researchers to be more appropriate in determining realistic exchange rate for naira in order to contribute positively to macroeconomic performances in Nigeria. Fapetu, and Oloyede in 2014 [13] , an examination of foreign exchange management against Nigeria economic growth was carried out focusing on the years 1070-2012. The least square estimation technique and Error correction model (ECM) was used and the study found out that managing the economy's foreign exchange rate does affect some economic variables, which will in-turn affects growth in the economy.…”

Section: Literature Reviewmentioning

confidence: 99%

Assessment of real exchange rate through vector error correction model (VECM) in Nigeria

Fasakin¹

2019

Int. J. Agric. Extension Social Dev.

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Despite the fact that exchange rate (REXR) is an integral part of macro economy and economic outlook of Africa, many Africans operate without an excise understanding of its operations. Hence, this study examined the assessment of real exchange rate (REXR) through Vector Error Correction Model (VECM) in Nigeria for the period of 1979-2014. Cointegration test, Vector Error Correction Model (VECM) technique and Granger causality test were employed in the analysis. The variables utilized in the study include real exchange rate (REXR), real gross domestic product (RGDP), and inflation rate (INFLR) and real interest rate (RINTR). Stationarity test was conducted and the results indicated that all the variables were stationary at level. The co-integration test result revealed that long run relationship exists among the variables understudy. More so, the long term co-integration vector suggests that real interest rate (RINTR) and real inflation rate (RINFLR) have a negative impact on the exchange rate, while ln(RGDP) have a positive on the exchange rate. Finally, the Granger causality results indicated multi-directional relationship between REXR to RGDP, REXR to RINFL and REXR to RINTR. Based on the findings above, it is recommended that government should ensure a stable interest rate, as an unstable interest rate will have an effect on real exchange rate, hence the exchange rate should reflect market realities to promote efficiency in resource allocation and productivity growth. Also, maintenance of a stable exchange rate regime should be prioritized through strong monetary policies by government so as to help in improving standard of living.

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Effect of exchange rate volatility on economic growth in Nigeria (1986-2014)

Cited by 8 publications

References 0 publications

Evaluating the Influence of Foreign Exchange Policy Regime on the Construction Sector in Nigeria

Evaluating the Influence of Foreign Exchange Policy Regime on the Construction Sector in Nigeria

Exchange Rate And National Output Performances: The Implication On Nigeria’s Economy

Assessment of real exchange rate through vector error correction model (VECM) in Nigeria

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