Journal of Economic, Finance Research and Review (JEFRR)

Regulating Gross Domestic Product and Balance of Payment in Nigeria Through Monetary Policy

EdehEdeh, Charles, Chinonso, Nwokoye, Ebele Stella, Amabuike, Lucky, Ifeanyichukwu, Ahiaba, Monday, Clement

24 March 2026 · Vol. 2, Issue 3, pp. 171-184

DOI: 10.65150/EP-jefrr/V2E3/2026-04

Abstract

This study examines the relevance of monetary policy instruments on macroeconomic goals in Nigeria with yearly time series data gathered between 1985 and 2023. The data are sourced from CBN (2024), NBS (2023) and WDI (2021). The unit root test confirmed a mix integrated results of order 1(0) and 1(1) while the bound test of co-integration revealed that all the models have long run association. The Autoregressive Distributed Lag (ARDL) techniques were employed for the empirical analysis and the empirical results confirmed that from the real gross domestic product (RGDP) model, interest rate and money supply (MS) positively impacted gross domestic product. The balance of payment model revealed that interest rate and money supply have significant impact on Nigerian balance of payment. From the foregoing, the findings call for policies such as expand financial inclusion and credit facilities for productive sectors such as manufacturing, agriculture, and technology to boost domestic investment. Secondly reduce dependence on oil revenues by promoting industrialization, renewable energy, and non-oil exports to safeguard the economy from oil price volatility. Thirdly ensure moderate interest and inflation rates through sound monetary policies that balance inflation control with investment promotion. Also stabilize the exchange rate through stronger foreign reserves and export diversification, while managing liquidity via effective CRR and open market operations. Lastly pursue export-led growth, infrastructure development, and coordinated fiscal–monetary policies to improve the balance of payments and sustain external stability.

Keywords: Monetary Policy, Real Gross Domestic Product (RGDP), Balance of Payments (BoP), ARDL Approach, Economic Growth, Interest Rate, Nigeria

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EdehEdeh, Charles, Chinonso, Nwokoye, Ebele Stella, Amabuike, Lucky, Ifeanyichukwu, Ahiaba, Monday, & Clement (2026). Regulating Gross Domestic Product and Balance of Payment in Nigeria Through Monetary Policy. Journal of Economic, Finance Research and Review, 2(3), 171-184. https://doi.org/10.65150/EP-jefrr/V2E3/2026-04

@article{EdehEdeh2026,
  title   = {Regulating Gross Domestic Product and Balance of Payment in Nigeria Through Monetary Policy},
  author  = {EdehEdeh and Charles and Chinonso and Nwokoye and Ebele Stella and Amabuike and Lucky and Ifeanyichukwu and Ahiaba and Monday and Clement},
  journal = {Journal of Economic, Finance Research and Review},
  year    = {2026},
  volume  = {2},
  number  = {3},
  pages   = {171-184},
  doi     = {10.65150/EP-jefrr/V2E3/2026-04},
  url     = {https://doi.org/10.65150/EP-jefrr/V2E3/2026-04}
}

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