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ABSTRACT
This study evaluated the effect of Money supply, Industrial capacity and Foreign Direct Investment on Economic growth in Nigeria. The specific objectives of this study was to ascertain the effect of broad money supply, Industrial capacity, and Foreign direct investment on Economic growth in Nigeria. The time series data ranging from 1990 to 2022 was used for this study. The ARDL model was used to analyze the data. Findings revealed that Broad money supply has a negative and insignificant relationship with Economic growth. Industrial capacity has a positive and insignificant relationship with Economic growth. Foreign direct investment has a negative and insignificant relationship with Economic growth. Lastly, Inflation rate has a negative and insignificant relationship with Economic growth. Based on the findings emanating from the regression analysis of this study, we can conclude Broad money supply, Industrial capacity, Foreign Direct investment and Inflation rate has a joint significant relationship with Economic growth in Nigeria. It is recommended that the Central Bank of Nigeria should pump money into the economy through open market operations, when the economy is highly illiquid and reduce money circulation by increasing interest rates when there is high liquidity. Government should create an enabling environment for more industries to be created. Government should provide the necessary infrastructure that can attract foreign direct investment into Nigeria. Finally, the Federal Government in Nigeria should control the circulation of money, set up price control boards to monitor the movement of prices and grant tax holidays to emerging industries in order to reduce the inflation rate in Nigeria.
