EFFECT OF SELECTED MACROECONOMIC VARIABLES ON THE NIGERIA ECONOMY

As the largest economy in Africa, Nigeria produces a large proportion of goods and services in the West African subcontinent and hence, her economy is affected by a number of micro and macro economic variables. The impact of some selected macroeconomic variables on the Nigeria economy for a period of thirty – eight years (1980 – 2017) was examined in this paper, using the gross domestic product (GDP) to represents the economy. At 5% significance level, only exchange rate and population growth rate significantly affects the Nigeria economy within the study periods. Unemployment rate (X₁) and crude oil exports (X₇) were found to be collinear, likewise exchange rate (X₃) and foreign direct investment in Nigeria (X₄). The error terms of the fitted model are positively autocorrelated while the error term of crude oil exports (X₇) is not normally distributed. This paper recommends to future researchers, transformation or increase in sample sizes of those variables that did not conform to multiple regression assumptions.