Analysis of the Effect of Relationship between Exchange Rate, Inflation Rate and Oil Price on Nigerian Economic Growth. Application of ARDL Modeling

This study investigated the impact of the relationships between exchange rate, inflation rate and oil price on Nigeria's economic growth covering a period of 42 years (1976-2020). The study employed econometric techniques to capture the objectives for which the study is poised to achieve. These included Autoregressive Distributive Lag (ARDL), and Johansen Co-integration test. From the ARDL test, the result of the study revealed that inflation hurts RGDP while oil price and exchange rate revealed a positive impact on RGDP which is the proxy for economic growth. The Johansen co-integration result highlighted the existence of a long-run equilibrium relationship among the variables namely: exchange rate, inflation, oil price and RGDP. Therefore, the study recommended that the government should provide effective and efficient policy(s) on exchange rates that would absorb any shock (positive/negative) in the economy.