Journal of Economics and Financial Analysis, 5 (2), pp. 23-41, [2021]

Economic Impact of Some Determinant Factors of Nigerian Inflation Rate



The Nigerian Government both previous and present has introduced several policies and programmes to reduce or proffer remedial measures to militate against the negative impact of high inflationary levels on the Nigerian economy. All these measures have not led to a productive result as the inflation rate has continued to sour higher over the years. This paper aimed at examining the economic influence of the determinant factors that influence inflationary trends that are multi-dimensional and dynamic which continue to defy solutions. The data used for this work was sourced from the National Bureau of Statistics and Central Bank of Nigeria, from 1983 to 2020. The ordinary least square approach was used to analyze the data and the result shows that consumer's price index, interest rate and total export has a positive effect on Nigeria inflation, but only the Consumer's Price Index (CPI) have a statistically significant effect on the Nigeria inflation at 99% confidence interval. Result also shows that the exchange rate, foreign reserve, money supply, real GDP, real income and total imports has a negative effect though not statistically significant on the Nigeria inflation rate. The result of the Granger causality test shows exchange rate and total imports to Granger cause Nigeria inflation. It is recommended that Government should improve locally manufacture products to meet international demands to reduce total imports.


Economic growth; Fiscal policy; Granger causality test; Gross domestic product; Inflationary rate; Interest rate.

JEL Classification

O47, E62, E31, E40.

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