ECONOMIC GROWTH, MONETARY POLICY, AND SUSTAINABLE DEVELOPMENT IN NIGERIA
This study explored the intricate relationship between economic growth, monetary policy, and sustainable development in Nigeria from 2000 to 2023, with life expectancy serving as a proxy for human development. Recognizing the critical role of macroeconomic indicators in shaping social outcomes, the study empirically investigated how Gross Domestic Product (GDP), Gross Capital Formation (GCF), the Monetary Policy Rate (MPR), and the Lending Rate (LDR) influenced life expectancy over time.
Using descriptive statistics, correlation analysis, unit root testing, and multiple regression models, the research draws on 23 years of time-series data to establish key patterns and associations among the variables.
Findings from the analysis reveal that GDP has a statistically significant and robust positive impact on life expectancy before and after the introduction of monetary policy (0.000958, p = 0.0000 and 0.000849, p = 0.0000 respectively), emphasizing the transformative power of economic expansion in improving health and living standards. However, GCF, despite its theoretical importance, demonstrated a marginal and statistically insignificant effect, suggesting that capital investments may not be effectively targeted toward sectors that directly influence welfare. The study further found that while the MPR has no significant direct impact on life expectancy, the LDR exhibited a strong negative correlation and a significant adverse effect (-0.066059, p = 0.0038). This indicates that high borrowing costs may hinder access to essential services and suppress inclusive economic activity, thereby undermining sustainable development goals.
The study concluded that while economic growth remains a critical pillar of development, it must be supported by efficient investment strategies and inclusive financial systems. The study’s policy recommendations include the need for lowering lending rates, enhancing investment efficiency, and adopting growth policies that prioritize social outcomes.
Key words: Economic Growth, Monetary Policy, Sustainable Development
