Impact of Inflation on Economic Activities in Nigeria
This study examines the impact of inflation on economics activities in Nigeria from 1981 to 2020. The essence of undertaking this study is to proffer solution to the continuous rise in price and depreciation of value of currency. The dependent variable was proxied by Annual Growth Rate of Manufacturing Value Added while the independent variable was proxied Inflation Rate, Interest Rate, Exchange Rate, and Money Supply. The method of data analysis was multiple regressions with the used of Auto Regressive Distributive Lag. The result of the study reveals that all the variables exhibit no significant impact on Annual Growth Rate of Manufacturing Value Added and a negative effect except exchange rate which exhibit no significant impact but positive effect in the long run. It was concluded that inflation rate has no significant impact on the economics activities in Nigeria for the period under review. The study recommended that monetary authorities should enforce price ceiling to curtail free upward movement of price; money supply should be regulated because it also has tendency of rising price though might not cause inflation; and production local goods should be emphasized to make Naira demanded in the foreign exchange market. Keywords: Inflation rate, Interest Rate, Money Supply, Manufacturing Value Added and Exchange Rate. JEL Classification code: E31