EXCHANGE RATE, IMPORT COST AND ECONOMIC GROWTH IN NIGERIA

This research explores the exchange rates, import costs, and economic growth in Nigeria between 1999 and 2022. Exchange rate fluctuations have remained a critical issue in Nigeria, given its implications on the cost of imports and overall economic performance. Despite numerous interventions by the government and the Central Bank, Nigeria continues to experience macroeconomic instability. This study employs the Autoregressive Distributed Lag (ARDL) model to analyze the relationships between these variables and exchange rate volatility. The results show that there is no significant relationship between the exchange rate and GDP suggests that policymakers should focus on structural reforms rather than solely relying on exchange rate adjustments to spur economic growth. The near-significant relationship between import costs and economic growth underscores the importance of monitoring and managing import prices. Higher import costs could stifle economic growth, particularly in sectors that depend heavily on foreign goods. The study concludes that exchange rates and import costs significantly impact Nigeria's economic growth, alongside the effects of lending interest rates and inflation. Based on the findings, the study recommend that policy makers should develop comprehensive economic policies that stabilize exchange rates and manage import costs effectively.