Modeling of Nigeria’s Economic Growth Rate: A Probability Distribution Fitting Approach

Abstract


 
 
 
 This study examined the probability distribution that best described the quarterly economic growth rate of Nigeria between 1960- 2015. The study collected secondary data from Central Bank of Nigeria (CBN) Statistical Bulletin 2015 on Gross Domestic Product to compute the economic growth rate of Nigeria. Six theoretical statistical distributions were fitted via Normal Distribution, Logistic Distribution, Laplace Distribution, Cauchy Distribution, Gumbel (Largest Extreme Value) Distribution and Generalized Logistic Distribution. The Laplace Distribution fitted the data as confirmed by Kolmogorov Simonov goodness of fit test, Akaike Information Criteria and Bayes Information Criteria. The probabilities of economic growth rate behaviours were obtained from the best fit distribution. The analysis showed that the chance of obtaining a negative quarterly economic growth rate is 28%. The chance of an economic recession is 8%. Also, the probability of having a positive single digit quarterly economic growth rate is 46%. In addition, having a double digit positive quarterly economic growth rate is 26%.
 
 
 
 

An Evaluation of the Optimal Inflation Target for Economic Growth in Nigeria

“…The findings by Eke et al (2018) diverge slightly from Awe and Gil-Alana's (2019). Using a probability distribution fitting approach, they analysed data spanning 55 years from the CBN's Statistical Bulletin on GDP to calculate Nigeria's GDP growth rate.…”

“…They fitted six theoretical statistical distributions using normal distribution, logistic distribution, Laplace distribution, Cauchy distribution, Gumbel distribution and generalized logistic distribution. Eke et al (2018) found that the mean quarterly economic growth rate was 4.75% for the period 1960 to 2015. They computed the median value for the quarterly economic growth rate as 2.88% with their standard deviation from the mean estimated to be 11.30%.…”