ABSTRACT
The primary aim of this project is to estimate the long run relationship between economic growth and currency devaluation. This project investigated the impact of currency devaluation on economic growth of Nigeria. This was achieved through a review of literature. In order to generate the necessary data for this research, the Central Bank of Nigeria Statistical Bulletin of and publications of the National Bureau of Statistics were used for the period of 2008 to 2017. The error correction mechanism result indicates that short term changes in economic growth may actually be sufficiently explained by currency devaluation and other factors selected in the model. Thus, there exist a significant short term relationship between economic growth and currency devaluation.
The project shows that in the short run currency devaluation leads to increase in output and improves the balance of payments but in the long run the monetary consequence of the devaluation ensures that the increase in output and improvement in the balance of payment is neutralized by the rise in prices. This project therefore supports the monetarists’ view of currency devaluation. Based on the above it is recommended that the monetary authorities should do what they can to reduce the temporary increase in prices lest it become permanent. Timing at this point becomes very crucial. More so, the Nigerian government should consider devaluation of currency as the last resort to the economic imbalance.
TABLE OF CONTENT
Title page ------------------------------------------------------------------- i
Certification page -----------------------------------------------------------ii
Declaration ------------------------------------------------------------------ iii
Dedication ------------------------------------------------------------------- iv
Acknowledgement ---------------------------------------------------------- v
Abstract ----------------------------------------------------------------------- vi
Definition of terms ---------------------------------------------------------- vii
Table of content ------------------------------------------------------------- ix
CHAPTER ONE
1.0 Introduction -------------------------------------------------------------- 1
1.1 Aims of the study -------------------------------------------------------- 4
1.2 Objective of the study --------------------------------------------------- 4
1.3 Scope of the study ------------------------------------------------------- 4
CHAPTER TWO
2.1 Literature review ---------------------------------------------------------- 5
2.2 Statistical tools ------------------------------------------------------------ 7
CHAPTER THREE
3.0 Methodology--------------------------------------------------------------- 10
3.1 Data collection ------------------------------------------------------------ 10
3.2 Method of data collection ----------------------------------------------- 10
3.3 Problem encountered ----------------------------------------------------- 15
CHAPTER FOUR
4.0 Presentation of data and Analysis------------------------------------- 16
4.1 Presentation of data ------------------------------------------------------ 16
CHAPTER FIVE
5.1 Conclusion ------------------------------------------------------------------ 21
5.2 Recommendation ----------------------------------------------------------- 22
Bibliography/reference ----------------------------------------------------- 24
