Macroeconomic Indicators and Economic Progress in Nigeria

Abstract

The main goal of any nation in the world is to sustain the growth of their economy and achieve development. This they plan to do by ensuring full employment of resources, stable exchange rate system, stable pricing system of goods and services, balance of payment equilibrium, maintenance of external reserves, and many more through various macroeconomic variables. However, scholars have conflicting opinion on the importance of these macroeconomic variables in this regards. To this end, this study sets to examine the effect of these macroeconomic variables on economic progress in Nigeria using quarterly data that covers 1995Q1 to 2025Q2. The data collected were analyzed using Augmented Dickey-Fuller test after confirming the presence of mixed order of integration. Various robustic checks were also carried out to standardize the findings of this research. From the result it was established that only foreign direct investment (FDI) presents a positive and statistically significant effect on economic progress in Nigeria, though some other included variables also have positive effect but their effects are statistically insignificance. Based on the above, it was therefore recommended, among others, that Nigerian government should strive to sustain and increase the flow of FDI into the country, formulate policies that will bring about exchange rate appreciation and reduce the volatility of the exchange rate.