The Determinants of Balance of Payments in Nigeria

Abstract

The Balance of Payments in Nigeria was studied using annual data from 1981 to 2019 in this article. The paper's major goal was to examine the long-term factors that influence Nigeria's Balance of Payments. The Autoregressive Distributed Lag Model (ARDL) was used in the investigation. Long-term results from the ARDL regression showed that the exchange rate coefficient was negative, whereas short-term results showed a positive value. Also, the coefficients of FDI, GDP growth, interest rates, and crude oil prices were positive and significant. There is a strong case can be made for governmental intervention to improve economic productivity, as evidenced by this study. To help the economy thrive, capital investments and expenditures should be made. The government should make incentives to prospective foreign investors in order to attract FDI inflows into the country. Government should also enhance safety and security and build a sense of belonging in the Niger Delta in order to promote peace and ease of doing business in the petroleum industry there.