Macroeconomic stability, exchange rate dynamics, and economic growth in Nigeria: An autoregressive distributed lag (ARDL) analysis, 1980–2024

The study examined Macroeconomic Stability, Exchange Rate Dynamics and Growth Performance in Nigeria. Data from 1980 to 2024 was employed in the study. The Autoregressive Distributed Lag (ARDL) method was used to estimate the data. The findings showed that in the long-run exchange rate has a positive and significant effect on GDP, inflation display a negative and statistically significant effect on GDP, interest rate is positive but statistically insignificant, money supply shows a negative but insignificant relationship with GDP. In the short-run all the variables; exchange rate, inflation, interest rate, and money supply are statistically insignificant. The study concludes that sustained economic growth in Nigeria depends more on long-term macroeconomic stability particularly exchange rate management and inflation control than on short-term policy adjustments, underscoring the need for consistent and credible macroeconomic policies to support long-run growth performance. The following recommendations are therefore made based on the findings; Policy makers should maintain a stable and competitive exchange rate regime, strengthen inflation control through coordinated macroeconomic policies, improve monetary policy transmission mechanisms, channel money supply growth toward the productive sectors and promote policy consistency and long-term macroeconomic stability.