IMPACT OF BALANCE OF PAYMENT ON ECONOMIC GROWTH IN NIGERIA: A BOUND TEST APPROACH
Imran Usman Sani, PhD, Isiaku Mohammed, Ph.D., FCA, CNA, ACS, ACMA and Ahmed Mohammed Salisu
Volume 12 Issue 1
Abstract
This study examined the Impact of balance of payment on economic growth in Nigeria for the period of 1994-2022. The study adopts ex-post facto design in order to answer the research questions. The study utilizes secondary sources of data extracted from the central bank of Nigeria's annual financial statistics bulletin 2022. The study undertakes unit root test employing augmented Dickey-Fuller (ADF) method to determine whether the variables are stationary or not in order to avoid spurious results. To achieve this, the study employed the Auto regressive distributed lag (ARDL) method for estimation. The findings showed that current account (CUA) has positive and significant impact on gross domestic product in Nigeria during the period under study, similarly the findings showed that capital account (CAP) has positive and insignificant impact on gross domestic product in Nigeria during the period under review and furthermore the findings showed that financial account (FIA) has positive and insignificant impact on gross domestic product in Nigeria during the period of investigation. Therefore, the study found that balance of payment generally has positive impact on gross domestic product in Nigeria over the period of the study. The study recommends that government should continue to put embargoes on the importation of certain products and services that are produced and rendered locally in our economy so as to improve our balance of payment position and also alleviate the pressure on our domestic currency, the Naira. Keywords: Balance of Payment, Current Account, Capital Account, Financial Account Economic growth, ARDL Model
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