The Impact of Persistent Depreciation of the Naira Currency on the Economy Growth in Nigeria

Abstract

The persistent depreciation of the naira currency in the recent time have resulted to a serious concern to entrepreneurship growth in the country. This study investigated the impact of persistent depreciation of the naira currency on the entrepreneurship growth in Nigeria. The result of this research work was determined through the use of multiple regression analysis using annual time series data for the observed years 1986- 2019. The data was sourced from Central Bank of Nigeria (CBN) statistical bulletin, 2019. The findings of the study were based on the data analysis. The findings revealed that: all the independent variables account for 98% of the variation in GDP, but more specifically, it was discovered that: money supply have positive impact on economic growth over the study period. However, the study revealed that depreciation of naira, exchange rate, lending rate have negative effect but insignificant on economic growth in Nigeria. The study concluded that currency depreciation affected economic growth in Nigeria negatively. Therefore, the study recommended among others that; Nigerian government should increase its competitive chance by either revaluating its currency or banning importation of some items produced locally to boost the domestic economy and enhance investment atmosphere further by combating inflation rate to single digit. Also, the financial authority through the central bank of Nigeria should managed exchange rate that will reduce cost of doing international transactions and exportation activities within Nigeria.

Keywords: Persistent Depreciation, Naira Currency, Economy Growth

DOI: 10.7176/EJBM/14-10-08

Publication date:May 31^st 2022