Effect of Monetary Policy on Economic Growth in Nigeria

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Onwuteaka, Ifeoma Cecilia | Okoye, P. V. C | Molokwu, Ifeoma Mirian

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Abstract :

The chequered history of the Nigeria monetary policy has created a visible asymmetry in the two known monetary regimes before and after SAP in the country. Years after the Structural Adjustment Programme SAP , the Nigeria economy grew to become the strongest economy in Africa and suddenly plunging into recession, a situation that have adversely affected the growth and development of the economy by ways of rising unemployment rate, soaring poverty and swollen external debt, thus suggesting that the failure of the monetary policy in curbing price instability has caused growth instability as Nigerias record of growth and development has become very poor. This study therefore examines the effect of monetary policy on economic growth in Nigeria using secondary data covering the period of 1980 2017 that were sourced from the Central Bank of Nigeria statistical bulletin. The models estimates were estimated via multiple econometric model of the ordinary least square to ascertain the effect of money supply, credit in the economy, interest rate on credit, infrastructure, inflationary rate, external debts, price index on growth in Nigeria. The results show that money supply, interest rate on credit, infrastructure and external debt were statistically significant in explaining its impacts on economic growth while other variables used in the study were all found to be statistically insignificant in explaining the growth rate of the Nigerian economy. The study recommends among others that for effective operation of the monetary policy measures in the Nigerian economy, the Central Bank of Nigeria should be granted full autonomy on its monetary policy functions. Partial autonomy should be replaced with full autonomy for the central banks in the developing economies at large which is invariably subjected to government interference and its politics. Onwuteaka, Ifeoma Cecilia | Okoye, P. V. C | Molokwu, Ifeoma Mirian "Effect of Monetary Policy on Economic Growth in Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-3 | Issue-3 , April 2019, URL: https://www.ijtsrd.com/papers/ijtsrd22984.pdf Paper URL: https://www.ijtsrd.com/humanities-and-the-arts/economics/22984/effect-of-monetary-policy-on-economic-growth-in-nigeria/onwuteaka-ifeoma-cecilia

Keyword :

MonetaryPolicy, EconomicGrowth, MoneySupply, Infrastructure, InflationaryRate, ExternalDebts, PriceIndex
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