Abstract
This study was on the impact of exchange rate management on the growth on Nigeria economy. Three objectives were raised which included: To examine the impact of exchange rate on Gross Domestic Product (GDP) in Nigeria, to evaluate the effect of exchange rate on Gross National Product (GNP) in Nigeria and to determine the impact of exchange rate on unemployment in Nigeria. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from CBN, Abuja. Hypothesis was tested using Chi-Square statistical tool (SPSS).
Chapter One Summary
Since the generalized fixed exchange rate regime and adoption of floating system by the industrialized countries in 1973, most countries including Nigeria, have experimented with various types of exchange rate arrangement ranging from the peg system to weighted currency basket, managed floating and more recently. to the monetary zone arrangement (Mordi, 2006). Inconsistent management of the various exchange rate regimes adopted so far by the country to help check volatility appears to have jeopardized the overall macroeconomic policy objectives. According to Mordi (2006), once an exchange rate is not fixed it will be subject to variation, thereby making floating exchange rates more volatile. The degree of volatility and the extent of stability maintained are affected by economic fundamentals. Thus, strong economic fundamentals are meant to produce favourable economic environment. The naira exchange rate has been fluctuating since the introduction of the Structural Adjustment Programme (SAP) in 1986.
Objective of the study
The objectives of the study are;
- To examine the impact of exchange rate on Gross Domestic Product (GDP) in Nigeria.
- To evaluate the effect of exchange rate on Gross National Product (GNP) in Nigeria.
- To determine the impact of exchange rate on unemployment in Nigeria
Research Hypotheses
The following research hypotheses are formulated to guide the study;
H1: there is no impact of exchange rate on Gross Domestic Product (GDP) in Nigeria.
H2: there is no effect of exchange rate on Gross National Product (GNP) in Nigeria
Chapter Two Summary
Exchange rate is the price of one country’s currency expressed in terms of other currencies. It determines the relative price of the domestic goods, as well as the strength of external sector participation in the internal trade. Exchange rate regime and interest rate remain important issues of discourse in the international finance as well as in developing nations, and more in economics embracing trade liberalization as requisite for economic growth (Obansa, Okoroafor, Aluko & Eze, 2003). In our own view, exchange rate refers to the absolute value of a country’s currency in comparison with other currencies on equal footing. It is the weight of a country’s currency in an international scale. It is usually the basis of international payment between countries. Certain factors affect it. Bergen (2017) argues that it is affected by differential in inflation, differential in interest rate, current account deficits, public debts, balance of trade, political stability and economic performance.
Chapter Three summary
In this study, the researcher adopted the convenient sampling method to determine the sample size. Out of all the entire population CBN the researcher conveniently selected 80 participant out of the overall population as the sample size for this study. According to Torty(2021), a sample of convenience is the terminology used to describe a sample in which elements have been selected from the target population on the basis of their accessibility or convenience to the researcher.
Chapter Four Summary
Findings
The calculated X2 = 8.6 and is greater than the table value of X2 at 0.05 significant level which is 7.815.
Decision
Since the X2 calculated value is greater than the critical table value that is 8.6 is greater than 7.815, the Null hypothesis is rejected and the alternative hypothesis which states that there is effect of exchange rate on Gross National Product (GNP) in Nigeria is accepted.
Chapter Five summary
1 Micro-economic factors that tend to influence GDP should be properly managed to help in stabilizing the exchange rate to the benefit of the citizens.
2 Government should provide enabling environment to encourage individuals to put in their best to enhance the GNP which will translate to a better wellbeing of the masses.
3 There should be a deliberate effort by the government to stimulate small and medium scale enterprises so that the rising unemployment in the country can be checkmated.
References
Akinbonola, T. (2012). The Dynamics of money supply, exchange rate and inflation in Nigeria: Journal of Applied Finance and Banking 2 (4), 117-141.
Akpan, E.O. & Atan, J. A. (2011). Effect of exchange rate movement on economic growth in Nigeria, CBN Journal of Applied statistics, (2),1 – 14.
Atique, R. & Malik, K. (2012). Impact of Domestic and external debts on economic growth of Pakistan. World Applied Science Journal. 20(1), 120-129.
Barro, R. I. & Gordon, D. B.(1983). Rules, discretion and reputation in a model of monetary policy. Journal of Monetary Economics12, 101-120.
Benson, U.O. & Victor, E.O. (2012). Exchange Rate Effect on the volume and variability of trade flow, Journal on International Money and Finance, 21, 481 – 406.
Bergen, T.V. (2017). 6 Factors that influence exchange rates. Retrieved from: http: www. Investopia.com/article/basics/04/050701.asp .
