Impact of Exchange Rate Volatility on Economic Performance in Nigeria

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Authors: Nimrod Zubati, Sikiru Jimoh Babalola, Mathias Mathew Madu

Abstract

This study examined the effect of exchange rate volatility on economic growth in Nigeria. The study used gross domestic product (GDP) as a proxy for economic growth and as the dependent variable, while exchange rate volatility (EXRVOL) was the independent variable. Time-series secondary data for the variables were sourced from the annual reports of the Central Bank of Nigeria (CBN) and its Statistical Bulletins covering the period 1981 to 2023. The study employed descriptive statistics and Autoregressive Distributed Lag Model bound regression analysis in E-Views 10.0 as data analysis techniques. The empirical results showed that exchange rate volatility had a significantly negative influence on gross domestic product, a proxy for economic growth. Based on the findings, the study recommends diversifying the country's economic base to reduce overdependence on crude oil exports and adopting appropriate macroeconomic policies to stabilize the exchange rate.

Keywords: Economic Performance; Exchange rate Volatility; ARDL; GARCH

2026 - NIJAF - 18 - 113 Nimrod ET AL..pdf

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