Statistical Modelling of Nigeria Inflation Rate From 1990 to 2020: A Pandemic for Economic Development

Owan, Raphael  Asu; Ojekudo, Nathaniel  A.; Sunday, Cecilia  James; Iwara, Komommo  Willie; Asu, Isaac  Asu

Owan, Raphael Asu Department of Mathematics and Statistics, Ignatius Ajuru University of Education, Port Harcourt, Nigeria
Ojekudo, Nathaniel A. Department of Mathematics and Statistics, Ignatius Ajuru University of Education, Port Harcourt, Nigeria
Sunday, Cecilia James Department of Biological Sciences, Havilla University, NdeIkom, Cross River State, Nigeria
Iwara, Komommo Willie Department of Computer Science, Havilla University, NdeIkom, Cross River State, Nigeria
Asu, Isaac Asu Department of Electrical Electronic Engineering, Cross River State University of Technology

Keywords: Inflation, Exchange rate, multiple linear regressions, pandemic, monopolistic market

Abstract

In this research work, we examine the impact of inflation/exchange rate on Nigeria's economic growth. With data obtained from the National Bureau of Statistics from 1990 to 2020, using SPSS version 23for the analysis. Utilizing the Multiple Linear Regression method, it suggested a model which is fitted as YGDP=β_0+β_1 INFL+β_2 EXR+U. Where YGDP is the real gross domestic product and U is the stochastic variable. From the results, it shows that since the F-statistic (10.268) is greater than the F critical value (0.000). we reject the null hypothesis and conclude that both inflation and exchange rates have a negative impact on economic growth. That is, high inflation/exchange rate are inimical or a pandemic to output growth. The research work also pointed out some causes of inflation including; increase in wages, monopolistic market, disruption of productive factors by civil war, removal of oil subsidy etc. These findings are essential for monetary policy formulation as they provide a guide for the policymakers to choose an optimal target for inflation, which is consistent with the long-term sustainable economic growth goals of the country.

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