ABSTRACT
This study investigates the macroeconomic determinants of Balance of Payments dynamics in
Nigeria between 1970-2011, using econometric method of cointegration and Error correction
mechanism. It found that Balance of Payments cointegrated with all the identified explanatory
variables, suggesting that Balance of Payments disequilibrium in Nigeria could be caused by
naira/dollar nominal exchange rate, interest rate differential, external debt growth and
Government spending. Again the dummy variable approach to chow test was conducted to check
whether there is a structural break between the pre-SAP and post-SAP periods in the naira/dollar
exchange rate. The test reveals that there is evidence of structural instability during the period
under consideration. The result equally reveals that the coefficients of most of the variables
under consideration confirms to the aprori expectation of economic theory. The researcher
therefore concludes that a reduction in government spending, increased domestic production
through private investment, effective capital movement, effective expenditure switching policy
and an implementation of fixed naira/dollar nominal exchange rate system are the solution to the negative stance of the Nigerian Balance of Payments.
TIMOTHY, O (2021). Determinants Of Balance Of Payments Disequilibrium In Nigeria. Afribary. Retrieved from https://afribary.com/works/determinants-of-balance-of-payments-disequilibrium-in-nigeria
TIMOTHY, OKOLI "Determinants Of Balance Of Payments Disequilibrium In Nigeria" Afribary. Afribary, 13 May. 2021, https://afribary.com/works/determinants-of-balance-of-payments-disequilibrium-in-nigeria. Accessed 26 Dec. 2024.
TIMOTHY, OKOLI . "Determinants Of Balance Of Payments Disequilibrium In Nigeria". Afribary, Afribary, 13 May. 2021. Web. 26 Dec. 2024. < https://afribary.com/works/determinants-of-balance-of-payments-disequilibrium-in-nigeria >.
TIMOTHY, OKOLI . "Determinants Of Balance Of Payments Disequilibrium In Nigeria" Afribary (2021). Accessed December 26, 2024. https://afribary.com/works/determinants-of-balance-of-payments-disequilibrium-in-nigeria