The Impact of Persistent Devaluation of Naira Currency on the Economy Growth in Nigeria

The ongoing devaluation of the Naira currency has raised significant concerns regarding the
growth of Nigerian economy. This study therefore investigate the impact of persistent
devaluation of the Naira currency from 2013-2022 employing an ex- post facto research design.
The result of the research work was determined through the use of multiple regression analysis.
The variables were estimated by conducting regression analysis using annual time series data for
the observed 10 years period. Data on devaluation of Naira (Inflation rate), exchange rate, interest
rate, money supply were sourced from a reputable institution, Central Bank of Nigeria (CBN)
Statistical Bulletin, 2022.
The findings of the study were based on the data analysis. The result revealed that: devaluation
of Naira (dn) [coef. = -0.004;p-value =0.188]indicating that there is no statistical significance
between Naira devaluation and GDP growth during the period, interest rate (ir)[coef. =-0.000;pvalue =0.913] reveals that interest rate has no significant effect on the growth of Nigerian
economy, Exchange rate (ex)[coef.= 0.000; p-value =0.591] indicating that exchange rate does
not have a significant effect on growth of Nigerian economy, Money supply (m2) [coef.
=0.890;p-value =0.009] indicates a statistically significant positive effect on the growth of
Nigerian economy. However, the study revealed that devaluation of Naira, exchange rate, interest
rate has no significant effect on the economic growth in Nigeria.
The study concluded that currency devaluation affect economic growth negatively but has no
significant effect on GDP growth. Based on the findings, it was recommended that; Devaluation
of Naira: While the devaluation of the Naira did not have a significant impact on economic
growth, government bodies should still focus on stabilizing the Naira to avoid the wider negative
consequences of continued currency depreciation. By fostering trade, industrial growth, and
structural reforms, the devaluation of Naira might have long-term indirect effects that could
eventually manifest in economic performance. Interest Rates: Since interest rates did not
significantly influence GDP growth, central bank authorities should take steps to streamline
monetary policy, aiming for lower and more stable interest rates that support both investment
and consumption without compromising inflation targets.