Balance of Payment and Economic Growth in Nigeria (1984-2024)
Abstract
This study explored the effect of balance of payments on economic growth in Nigeria. The objectives of the study were to establish the connection between the balance of payments and economic growth. Secondary data were collected from the Central Bank of Nigeria Statistical Bulletin. Real GDP was the dependent variable while balance of payment (capital and current account), exceptional financing and net errors/omission were the independent variables. The Augmented Dickey-Fuller (ADF) test was used to test for stationarity, the results revealed that the variables were stationary at first difference. Also the analysis revealed that there was long run relationship between balance of payment and economic growth of Nigeria. Results from the error correction model revealed that balance of payment exerted a significantly negative effect on economic growth of Nigeria, exceptional financing had negative and significant effect on economic growth, while net error and omissions had positive and significant effect on economic growth of Nigeria. The study concluded that Nigeria’s balance of payment has not been favorable in enhancing economic growth. Exceptional financing statistics for Nigeria are on the increase and this has led to heightened pressure on the economy and slowing down of real gross domestic product. It was recommended that the Nigerian government should strive to boost the country’s exports as this is the only way to put the balance of payment statistics on a positive trend and ensure sustained economic growth.
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Published in UNIPORT JOURNAL OF BUSINESS, ACCOUNTING & FINANCE MANAGEMENT
ISSN: 1596-9911
This article appears in our peer-reviewed academic journal
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