EFFECTS OF SELECTED MONETARY POLICY VARIABLES ON INCLUSIVE GROWTH IN NIGERIA
Hitlar Inedu, Wada Emmanuel Ome and Yusuf Muhammed Sanusi
Volume 7 Issue 1
Abstract
Monetary policy is an economic stabilization catalyst geared towards achieving sustainable amount of inclusive growth in any economy especially developing nation like Nigeria. Hence,this made it imperative for the study to examine the effects of selected macroeconomic variables on inclusive growth in Nigeria. The study utilized time series data for the period of 1999 to 2019 sourced from CBN Statistical Bulletin, 2019 which included; Gross Domestic Product per capita plus Gini Coefficient as proxy for inclusive growth being the dependent variable while selected monetary policy variables such as; monetary policy rate, exchange rate, inflation rate and money supply were used as the independent variables. The study employed the econometric technique of ARDL as its method of estimation. Based on the long run form of the ARDL, monetary policy rate, exchange rate, inflation rate had significant negative effects on inclusive growth in Nigeria. Furthermore, money supply had significant positive effect on inclusive growth in Nigeria within the study period. Based on the findings, the study recommended that government should as a matter of urgency through the monetary policy committee set up tactical monetary policy strategies to reduce the amount of monetary policy rate to the barest minimum level in order to attain the desired level of inclusive growth in the Nigerian economy. Government should embark on holistic exchange rate policy in order to achieve the required amount of inclusive growth rate in Nigeria. Government should come up with anti-inflationary policies to reduce inflationary pressure in Nigerian so as to accomplish sustainable level of inclusive growth. Finally, government at this juncture in the Nigerian economy should increase the amount of money supply or in circulation through expansionary monetary policy in order to boost inclusive growth in the Nigerian economy.
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