PRICE OF FUNDS AND GROSS PRIVATE DOMESTIC INVESTMENT: EVIDENCE FROM NIGERIA
Abstract
The paper provided empirical evidence of price of funds in the financial market and domestic investment in Nigeria for the period 1986-2021. Time series data were extracted from the Central Bank of Nigeria (CBN) statistical bulletin and the National Bureau of Statistics annual digest. Ordinary Least Square (OLS) multiple regression model was employed. Empirical results indicated that price of funds negatively affected gross domestic private investments during the period. In addition, national income had a significant positive effect on gross domestic private investment in Nigeria, while inflation rate with a negative coefficient value significantly affected gross domestic private investment. Finally, exchange rate affected gross domestic private investment positively but was non-significant. The paper recommended, among other measures, that the monetary authorities should periodically review the monetary policy rate to stem the tides of inflation volatility with a view to promoting investments in the private sector for economic growth and prosperity of the citizenry