Does Misery affect Economic Growth in Nigeria?
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Date
2024-04
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Journal of Finance, Governance and Strategic Studies
Abstract
Nigeria’s economy continues to struggle with elevated misery index (MSI), occasioned by high rates of inflation and unemployment. This situation is capable of dragging both micro and macroeconomic outcomes in the country. This paper assessed the impact of economic misery on the growth of Nigeria’s economy within the period 1990-2022. The Autoregressive Distributed Lag modeling approach, anchored on the neoclassical growth theory was employed after the unit root test results confirmed integration of order zero and one. The Bounds cointegration test was conducted and the results established the existence of long run relationship among the variables. Findings of the study indicated that economic misery is a threat to the growth of the nation’s economy. This was evident in the negative and statistically significant coefficient of MSI. Other variables such as labour force and foreign direct investment raised economic growth significantly. The policy direction therefore, is that government’s efforts should be geared towards reduction in economic misery in Nigeria. For this to be possible, monetary and fiscal policies should be employed to address high rate of inflation while employment should be generated through provision of enabling environment. The motivation for the policy suggestion is the statistical significance of coefficients of the variables. In addition, inflation and unemployment are components of MSI equation, which Hanke referred to as the ‘bads’. Therefore, addressing these issues will help to reduce the index and control its negative influence on economic growth in the country.
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Dauda, R.S. (2024). Does misery affect economic growth in Nigeria? Journal of Finance, Governance and Strategic Studies, 7(2), 23-34.