Financial efficiency, exchange rate variation and investment growth in Nigeria

Abstract

The study investigates the influence of financial efficiency, exchange rate variation, economic performance, trade, and population growth in Nigeria by utilizing the ARDL technique from 1980 to 2022. The result of the stationarity test reveals all the variables are stationary and the bound test illustrates a long-run relationship among the variables in the study’s model. The outcome of the short-run analysis shows financial efficiency, economic progress and trade accelerate the level of investment growth in Nigeria. Nonetheless, the population level does not influence investment growth. The long-run estimates illustrate that financial efficiency, economic growth, trade and population have a positive and significant influence on investment growth in Nigeria. However, exchange variation decreases the level of investment growth in the country. Therefore, the study suggests financial reform policies through effective and efficient credit facilitates to the citizens from both central and conventional banks in the country. In addition, effective monetary policies should be embarked on to regain the naira value against the foreign currency to promote investment level right from the nation’s domestic investors.