Real Gross Domestic Growth Determinants in an Oil Revenue Dependent Country: An Assessment of Nigeria’s Exchange Rate and Interest Rate

Felicia Akujinma Anyanwu; Patrick Kanayo Adigwe; Amalachukwu Chijindu Ananwude

doi:doi:10.11648/j.sjee.20170504.11

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Real Gross Domestic Growth Determinants in an Oil Revenue Dependent Country: An Assessment of Nigeria’s Exchange Rate and Interest Rate

Felicia Akujinma Anyanwu, Patrick Kanayo Adigwe, Amalachukwu Chijindu Ananwude

Published in Science Journal of Energy Engineering (Volume 5, Issue 4)

Received: 30 June 2017 Accepted: 17 July 2017 Published: 23 October 2017

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Abstract

The determinants of real gross domestic product growth in Nigeria was ascertained in this study. The research was motivated by 1.53 percent decline in real gross domestic product growth rate in 2016 coupled with the foreign exchange crisis that engulfed the economy. Specifically, the study determined whether exchange rate and interest rate predict real gross domestic product growth using secondary data obtained from Central Bank of Nigeria for the period 1980 to 2016. Aside testing for stationarity of the data and diagnosing the model to meet standard econometric postulations, the Granger Causality prediction estimation was employed to realize the objective of the research. Firstly, by the application of Johansen co-integration and ARDL methodology, the study identify that exchange rate and interest rate are not co-integrated/related with real gross domestic product growth. Secondly, the multiple regression estimated via ARDL shows that exchange rate and interest rate have negative but insignificant relationship with real gross domestic product growth. Finally, the study empirically found that exchange rate and interest rate are not determinants of real gross domestic product growth in Nigeria. To strengthen the value of the local currency against the US dollar in particular, and other currencies of the world, a well-managed foreign exchange floating system is preferred. Diversification from oil to non-oil policies should be pursued with vigour with the view of aggressively down playing importation to reduce the pressure on forex which jolts up exchange rate position adversely.

Published in	Science Journal of Energy Engineering (Volume 5, Issue 4)
DOI	10.11648/j.sjee.20170504.11
Page(s)	78-86
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2017. Published by Science Publishing Group

Keywords

Real Gross Domestic Product, Exchange Rate, Interest Rate

References

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APA Style

Felicia Akujinma Anyanwu, Patrick Kanayo Adigwe, Amalachukwu Chijindu Ananwude. (2017). Real Gross Domestic Growth Determinants in an Oil Revenue Dependent Country: An Assessment of Nigeria’s Exchange Rate and Interest Rate. Science Journal of Energy Engineering, 5(4), 78-86. https://doi.org/10.11648/j.sjee.20170504.11

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ACS Style

Felicia Akujinma Anyanwu; Patrick Kanayo Adigwe; Amalachukwu Chijindu Ananwude. Real Gross Domestic Growth Determinants in an Oil Revenue Dependent Country: An Assessment of Nigeria’s Exchange Rate and Interest Rate. Sci. J. Energy Eng. 2017, 5(4), 78-86. doi: 10.11648/j.sjee.20170504.11

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AMA Style

Felicia Akujinma Anyanwu, Patrick Kanayo Adigwe, Amalachukwu Chijindu Ananwude. Real Gross Domestic Growth Determinants in an Oil Revenue Dependent Country: An Assessment of Nigeria’s Exchange Rate and Interest Rate. Sci J Energy Eng. 2017;5(4):78-86. doi: 10.11648/j.sjee.20170504.11

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@article{10.11648/j.sjee.20170504.11,
  author = {Felicia Akujinma Anyanwu and Patrick Kanayo Adigwe and Amalachukwu Chijindu Ananwude},
  title = {Real Gross Domestic Growth Determinants in an Oil Revenue Dependent Country: An Assessment of Nigeria’s Exchange Rate and Interest Rate},
  journal = {Science Journal of Energy Engineering},
  volume = {5},
  number = {4},
  pages = {78-86},
  doi = {10.11648/j.sjee.20170504.11},
  url = {https://doi.org/10.11648/j.sjee.20170504.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.sjee.20170504.11},
  abstract = {The determinants of real gross domestic product growth in Nigeria was ascertained in this study. The research was motivated by 1.53 percent decline in real gross domestic product growth rate in 2016 coupled with the foreign exchange crisis that engulfed the economy. Specifically, the study determined whether exchange rate and interest rate predict real gross domestic product growth using secondary data obtained from Central Bank of Nigeria for the period 1980 to 2016. Aside testing for stationarity of the data and diagnosing the model to meet standard econometric postulations, the Granger Causality prediction estimation was employed to realize the objective of the research. Firstly, by the application of Johansen co-integration and ARDL methodology, the study identify that exchange rate and interest rate are not co-integrated/related with real gross domestic product growth. Secondly, the multiple regression estimated via ARDL shows that exchange rate and interest rate have negative but insignificant relationship with real gross domestic product growth. Finally, the study empirically found that exchange rate and interest rate are not determinants of real gross domestic product growth in Nigeria. To strengthen the value of the local currency against the US dollar in particular, and other currencies of the world, a well-managed foreign exchange floating system is preferred. Diversification from oil to non-oil policies should be pursued with vigour with the view of aggressively down playing importation to reduce the pressure on forex which jolts up exchange rate position adversely.},
 year = {2017}
}

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TY  - JOUR
T1  - Real Gross Domestic Growth Determinants in an Oil Revenue Dependent Country: An Assessment of Nigeria’s Exchange Rate and Interest Rate
AU  - Felicia Akujinma Anyanwu
AU  - Patrick Kanayo Adigwe
AU  - Amalachukwu Chijindu Ananwude
Y1  - 2017/10/23
PY  - 2017
N1  - https://doi.org/10.11648/j.sjee.20170504.11
DO  - 10.11648/j.sjee.20170504.11
T2  - Science Journal of Energy Engineering
JF  - Science Journal of Energy Engineering
JO  - Science Journal of Energy Engineering
SP  - 78
EP  - 86
PB  - Science Publishing Group
SN  - 2376-8126
UR  - https://doi.org/10.11648/j.sjee.20170504.11
AB  - The determinants of real gross domestic product growth in Nigeria was ascertained in this study. The research was motivated by 1.53 percent decline in real gross domestic product growth rate in 2016 coupled with the foreign exchange crisis that engulfed the economy. Specifically, the study determined whether exchange rate and interest rate predict real gross domestic product growth using secondary data obtained from Central Bank of Nigeria for the period 1980 to 2016. Aside testing for stationarity of the data and diagnosing the model to meet standard econometric postulations, the Granger Causality prediction estimation was employed to realize the objective of the research. Firstly, by the application of Johansen co-integration and ARDL methodology, the study identify that exchange rate and interest rate are not co-integrated/related with real gross domestic product growth. Secondly, the multiple regression estimated via ARDL shows that exchange rate and interest rate have negative but insignificant relationship with real gross domestic product growth. Finally, the study empirically found that exchange rate and interest rate are not determinants of real gross domestic product growth in Nigeria. To strengthen the value of the local currency against the US dollar in particular, and other currencies of the world, a well-managed foreign exchange floating system is preferred. Diversification from oil to non-oil policies should be pursued with vigour with the view of aggressively down playing importation to reduce the pressure on forex which jolts up exchange rate position adversely.
VL  - 5
IS  - 4
ER  -

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Author Information

Felicia Akujinma Anyanwu

Department of Banking and Finance, Nnamdi Azikiwe University, Awka, Nigeria
Patrick Kanayo Adigwe

Department of Banking and Finance, Nnamdi Azikiwe University, Awka, Nigeria
Amalachukwu Chijindu Ananwude

Department of Banking and Finance, Nnamdi Azikiwe University, Awka, Nigeria

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APA Style

Felicia Akujinma Anyanwu, Patrick Kanayo Adigwe, Amalachukwu Chijindu Ananwude. (2017). Real Gross Domestic Growth Determinants in an Oil Revenue Dependent Country: An Assessment of Nigeria’s Exchange Rate and Interest Rate. Science Journal of Energy Engineering, 5(4), 78-86. https://doi.org/10.11648/j.sjee.20170504.11

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ACS Style

Felicia Akujinma Anyanwu; Patrick Kanayo Adigwe; Amalachukwu Chijindu Ananwude. Real Gross Domestic Growth Determinants in an Oil Revenue Dependent Country: An Assessment of Nigeria’s Exchange Rate and Interest Rate. Sci. J. Energy Eng. 2017, 5(4), 78-86. doi: 10.11648/j.sjee.20170504.11

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AMA Style

Felicia Akujinma Anyanwu, Patrick Kanayo Adigwe, Amalachukwu Chijindu Ananwude. Real Gross Domestic Growth Determinants in an Oil Revenue Dependent Country: An Assessment of Nigeria’s Exchange Rate and Interest Rate. Sci J Energy Eng. 2017;5(4):78-86. doi: 10.11648/j.sjee.20170504.11

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@article{10.11648/j.sjee.20170504.11,
  author = {Felicia Akujinma Anyanwu and Patrick Kanayo Adigwe and Amalachukwu Chijindu Ananwude},
  title = {Real Gross Domestic Growth Determinants in an Oil Revenue Dependent Country: An Assessment of Nigeria’s Exchange Rate and Interest Rate},
  journal = {Science Journal of Energy Engineering},
  volume = {5},
  number = {4},
  pages = {78-86},
  doi = {10.11648/j.sjee.20170504.11},
  url = {https://doi.org/10.11648/j.sjee.20170504.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.sjee.20170504.11},
  abstract = {The determinants of real gross domestic product growth in Nigeria was ascertained in this study. The research was motivated by 1.53 percent decline in real gross domestic product growth rate in 2016 coupled with the foreign exchange crisis that engulfed the economy. Specifically, the study determined whether exchange rate and interest rate predict real gross domestic product growth using secondary data obtained from Central Bank of Nigeria for the period 1980 to 2016. Aside testing for stationarity of the data and diagnosing the model to meet standard econometric postulations, the Granger Causality prediction estimation was employed to realize the objective of the research. Firstly, by the application of Johansen co-integration and ARDL methodology, the study identify that exchange rate and interest rate are not co-integrated/related with real gross domestic product growth. Secondly, the multiple regression estimated via ARDL shows that exchange rate and interest rate have negative but insignificant relationship with real gross domestic product growth. Finally, the study empirically found that exchange rate and interest rate are not determinants of real gross domestic product growth in Nigeria. To strengthen the value of the local currency against the US dollar in particular, and other currencies of the world, a well-managed foreign exchange floating system is preferred. Diversification from oil to non-oil policies should be pursued with vigour with the view of aggressively down playing importation to reduce the pressure on forex which jolts up exchange rate position adversely.},
 year = {2017}
}

Copy | Download

TY  - JOUR
T1  - Real Gross Domestic Growth Determinants in an Oil Revenue Dependent Country: An Assessment of Nigeria’s Exchange Rate and Interest Rate
AU  - Felicia Akujinma Anyanwu
AU  - Patrick Kanayo Adigwe
AU  - Amalachukwu Chijindu Ananwude
Y1  - 2017/10/23
PY  - 2017
N1  - https://doi.org/10.11648/j.sjee.20170504.11
DO  - 10.11648/j.sjee.20170504.11
T2  - Science Journal of Energy Engineering
JF  - Science Journal of Energy Engineering
JO  - Science Journal of Energy Engineering
SP  - 78
EP  - 86
PB  - Science Publishing Group
SN  - 2376-8126
UR  - https://doi.org/10.11648/j.sjee.20170504.11
AB  - The determinants of real gross domestic product growth in Nigeria was ascertained in this study. The research was motivated by 1.53 percent decline in real gross domestic product growth rate in 2016 coupled with the foreign exchange crisis that engulfed the economy. Specifically, the study determined whether exchange rate and interest rate predict real gross domestic product growth using secondary data obtained from Central Bank of Nigeria for the period 1980 to 2016. Aside testing for stationarity of the data and diagnosing the model to meet standard econometric postulations, the Granger Causality prediction estimation was employed to realize the objective of the research. Firstly, by the application of Johansen co-integration and ARDL methodology, the study identify that exchange rate and interest rate are not co-integrated/related with real gross domestic product growth. Secondly, the multiple regression estimated via ARDL shows that exchange rate and interest rate have negative but insignificant relationship with real gross domestic product growth. Finally, the study empirically found that exchange rate and interest rate are not determinants of real gross domestic product growth in Nigeria. To strengthen the value of the local currency against the US dollar in particular, and other currencies of the world, a well-managed foreign exchange floating system is preferred. Diversification from oil to non-oil policies should be pursued with vigour with the view of aggressively down playing importation to reduce the pressure on forex which jolts up exchange rate position adversely.
VL  - 5
IS  - 4
ER  -

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