Accounting Implications of Oil Price, Interest Rate and Unemployment on Nigeria’s Economic Growth

Abstract

Holding other variables constant, exchange rate and unemployment are supposed to have an inverse relationship. Is this really the case in the Nigerian economy? Does oil price have an impact on unemployment in Nigeria? Our study analyzed the accounting implications of oil price, interest rate and unemployment on Nigeria’s economic growth using data from 1981 to 2019. Using ARDL and VEC models, our finding revealed that all variables had a short and long term association and were statistically significant, hence we recommended better economic policies should be put in place by government to curb unemployment because this has a long and short run implication on GDP, and that if not properly managed can lead to economic and social vices. The government should formulate policies that are economically friendly in order to encourage local production to boost our export and improve our local currency (Naira) and the exchange rate. This will increase local production and firms will create employment opportunities for our teeming population. Increased oil price has really helped in boosting our GDP. However, the economy should be diversified because any drop in oil price will definitely affect our GDP drastically, both in the short and long run.

Keywords: Gross Domestic Product, Interest Rate, Oil price, Unemployment, accounting implication, and economic policy, efficient wage model

DOI: https://doi.org/10.37745/ejaafr/vol8.no7.pp33-41.2020

Article Review Status: Published

Pages: 33-41 (Download PDF)

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