External Reserves: Panacea for Economic Growth in Nigeria

Abstract

This research work focused on external reserve as a solution to economic growth and in Nigeria. Two hypotheses were tested with data spanning from 2004 to 2015 using Ordinary Least Squares (OLS) regression technique. Findings however revealed that external reserve has no positive significant impact on economic growth in Nigeria within the period under review and that external reserves have no positive significant influence on exchange rate in Nigeria. Other findings deduced from data description revealed that foreign reserve of Nigeria has been declining marginally within the period under study and that it was occasioned by the 2007-2008 global financial crisis supported by the nonchalant attitude of the government towards accumulation of international reserves. It was recommended amongst all that in accumulating excessive foreign exchanges, the country should have proper management of reserves.

Keywords: External Reserves; GDP; Exchange Rate