Macroeconomic Variables and Standard of Living in Nigeria (1981-2023)

Abstract

This study investigated the macroeconomic variables and standard of living in Nigeria from 1981 - 2023. The specific objectives upon which this study was carried out was to ascertain the effect of {inflation, exchange rate, interest rate, unemployment and gross domestic product (GDP)} on the standard of living in Nigeria. The study was carried out using the following tools of analysis- descriptive statistics, unit root and Ordinary Least Square (OLS) method of analysis to examine the effect of inflation, exchange rates, interest rates, gross domestic product (GDP) and unemployment on the standard of living in Nigeria. The nature of data for this research was secondary data. The data were sourced from Central Bank of Nigeria (CBN) Statistical Bulletin, International Monetary Fund Statistical Bulletin, World Bank Statistical Bulletin and data from National Bureau of Statistics (NBS). The findings indicated that macroeconomic variables have an influence on the standard of living in Nigeria with GDP growth exerting positive impact at varying degrees. The study concluded that high gross domestic product (GDP) and low interest rates have a significant positive effect on economic growth in Nigeria within the period under study. This study recommended that the Central Bank of Nigeria should maintain an economic friendly interest rate regime to encourage investment and local production of goods. The Government should also invest in small businesses and encourage GDP growth in order to reduce poverty. These study contributed to existing literature on macroeconomic determinants of standard of living and provided valuable insights for policy makers seeking to pursue poverty reduction agenda in Nigeria.