Effect of Nigeria Macroeconomic Environment on the Performance of the National Economy: Implications

Abstract

The rebirth of democratic dispensation in Nigeria was threatened with multi facet challenges of high external indebtedness, rising rate of inflation from single to double digit, unabating high rate of unemployment, slow paced but fluctuating GDP growth rate, foreign reserve inadequacy, and the terrain of the country’s power generation/distribution misfortune, which all had been the evident lengthened involvement of the military in the Nigeria political history. Adopting data extracts from the CBN annual reports, SEC statistical bulletins and the NBS, the relevant macroeconomic variables selected for this study were subjected to the OLS regression analysis towards ascertaining the extent of relationship existing between the macroeconomic indicators selected and the nation’s growth level. Result obtained in this study showed that although a unique relationship exist between the country’s national currency exchange rate to a US dollar, inflation rates, monetary policies, and the extent or level of GDP growth the country has attained, the sustenance and continued maintenance of an upward growth remain a source of worry to Nigerians and national economists, considering the country’s unsolved problems of energy generation and distribution which in turn has undermined the performance of the industrial and employment sectors.