THE IMPACT OF MONEY SUPPLY ON ECONOMIC GROWTH IN NIGERIA. (1981-2010)

ABSTRACT 

The study examined the impact of money supply on economic growth in Nigeria.  

In the model specified, real gross domestic product (real GDP) is the regress while 

broad money supply, real exchange rate, and real interest rate are the regressors. 

Data was collected from CBN statistical Bulletin for the period 1981 – 2010.  The 

statistical techniques used for the analysis is the ordinary least square techniques 

with the aid of Stata 10 software package.  The research indicates that real interest 

rate and real exchange rate in Nigeria within the period under study failed to 

influence real gross domestic product while broad money supply being the only 

significant regressor influenced real gross domestic product (real GDP) within the 

period under study. It has been identified that the major problem militating against 

the poor performance of monetary policy instruments in influencing real GDP in 

Nigeria is time lags involved which now makes any policy employed by the 

government to take many months to achieve its full effect. In effect to this, 

effectiveness of influencing real gross domestic product in Nigeria maybe 

promoted by emphasizing on broad money supply instead of on monetary target 

variables due to the fact that broad money supply is statistically significant.    

TABLE OF CONTENTS 

Cover Page .................................................................................................. i 

Title Page  ................................................................................................... ii 

Approval Page ............................................................................................. iii 

Dedication ................................................................................................... iv 

Acknowledgment ........................................................................................ v 

Abstract ....................................................................................................... vi 

Table of Contents ........................................................................................ vii 

 

CHAPTER ONE:  INTRODUCTION 

1.1   Background to the study .......................................................................  

1.2   Statement of Problem ............................................................................  

1.3   Objective of the Study ..........................................................................  

1.4   Research Hypothesis .............................................................................  

1.5   Significance of Study ............................................................................  

1.6   Scope and Limitation of Study .............................................................  

 

 

CHAPTER TWO:  LITERATURE REVIEW 

2.1   Review of Theoretical Literature ........................................................  

2.2   Review of Empirical Literature ..........................................................  

2.3   Why is money supply important .........................................................  

2.4   Meaning of monetary policy ...............................................................  

2.5   Objectives of Monetary Policy  ..........................................................  

2.6   Monetary Policy  formulation in Nigeria  ...........................................  

2.7   Determinants of money supply in Nigeria ..........................................  

2.8   Monetary policy in Nigeria .................................................................  

2.9   Factors that have militated against the effectiveness of monetary policy in        

Nigeria .........................................................................................................  

2.10   Nigeria financial institutions .............................................................  

2.11   Objectives of Nigerian financial institutions ....................................  

2.12   Significant developments in the Nigerian financial  

           Institutions ........................................................................................  

2.13   The impacts of money supply in Nigeria economy ..........................  

2.14   Control of money supply in Nigeria .................................................  

 

CHAPTER THREE 

3.0   Research Design and Methodology ....................................................  

3.1   Introduction .........................................................................................  

3.2   Model Specification ............................................................................  

3.3   Estimation procedure ..........................................................................  

3.4   Method of evaluation ..........................................................................  

3.5   Data required and sources ...................................................................  

 

CHAPTER FOUR 

4.0   Presentation and Analysis of Result ...................................................  

4.1   Presentation of Result .........................................................................  

4.2.   Analysis based on statistical criteria (1

st

 order test) 

4.3   Econometric test or 2

nd

 order test ........................................................  

4.4   evaluation of working hypothesis .......................................................  

 

CHAPTER FIVE 

5.0   Summary, Conclusion and Policy Recommendation .........................  

5.1   Summary of finding ............................................................................  

5.2   Policy Recommendation .....................................................................  

5.3   Conclusion ..........................................................................................  

Bibliography ................................................................................................  

Appendix