Price Volatility, Macroeconomic Indicators, and Education Spending Nexus in Nigeria (1990-2024)

This study investigated the relationship among price volatility, macroeconomic indicators, and education spending in Nigeria from 1990 to 2024. Secondary data were sourced from the Central Bank of Nigeria Statistical Bulletins and the World Bank Development Indicators. Stationarity properties were examined using the Augmented Dickey–Fuller (ADF) and Phillips–Perron (PP) tests, while the Johansen co-integration approach was applied to determine long-run equilibrium relationships. The Auto-Regressive Distributed Lag (ARDL) model was used for regression analysis, followed by heteroskedasticity tests for model diagnostics. Pairwise Granger Causality analysis was employed to assess causal directions among variables. Findings revealed mixed stationarity levels and significant long-run effects. A 1% rise in inflation rate increased total expenditure on education (TEE) by 30%, while exchange rate (13%), gross capital formation (4%), and interest rate (21%) all exerted positive effects on TEE. The model’s R² (0.99) indicated a strong explanatory power. The study recommends inflation reduction strategies and expansion of education financing to tackle rising costs in Nigeria’s education sector.