EFFECT OF MACROECONOMIC VARIABLES ON PRIVATE SECTOR FINANCING IN NIGERIA
Abstract
This study examined the effect of macroeconomic variables on private sector financing in Nigeria The study proxied the independent variable with three variables namely; money supply, inflation rate and monetary policy rate while the dependent variable was private sector financing in Nigeria. The data used were secondary time series data for the period 1991 to 2022. The data were sourced from the Central Bank of Nigeria (CBN) Statistical Bulletin. The relationship between the dependent and independents variables were estimated using ordinary least square (OLS) regression model. The findings from the results revealed that interest rate (INTR) and inflation rate (INFL) maintain negative relationship with the private sector financing (PSF), money supply (MS) maintains positive and significant relationship with private sector financing. The individual explanatory variables employed revealed the level of significance with interest rate which has p-value of 0.0300, has significant negative effect on the Nigerian private sector financing. Also, with p-value of 0.0300 inflation rate has significant negative effect on the Nigerian private sector financing. Money supply has a significant effect on private sector financing with pvalue of 0.0000. Based on the findings above, the study therefore, concluded that macroeconomic variables has a significant effect on private sector financing in Nigeria within the time under review. Therefore, the study recommended that the Central Bank of Nigeria should put up measures to ensure an increase in the volume of money in circulation and that money supply contribute positively and significantly to availability of adequate funding to the private sector of Nigerian economy
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