MACROECONOMIC VARIABLES AND THE DEVELOPMENT OF NIGERIA ECONOMY

This study examines the impact of key macroeconomic variables interest rate, inflation rate, and exchange rate on Nigeria’s economic development over the period 2015 to 2024. The research is driven by the persistent macroeconomic instability Nigeria has faced since the Structural Adjustment Programme (SAP) era, which has contributed to fluctuating development outcomes. While several studies have explored macroeconomic factors and economic growth, limited empirical evidence directly links these variables to economic development using recent data. This study addresses this gap by analysing how macroeconomic volatility influences Nigeria’s development performance. An ex-post facto research design was adopted, using secondary annual data obtained from the Central Bank of Nigeria, National Bureau of Statistics, and World Bank. GDP growth rate was used as a proxy for economic development, while inflation, interest rate, and exchange rate served as the explanatory variables. The data were analysed using descriptive statistics, correlation analysis, and Ordinary Least Squares (OLS) regression, supported by diagnostic tests to ensure model robustness. Findings reveal that both inflation and interest rates have significant negative effects on economic development, suggesting that rising price levels and borrowing costs hinder productive investment and economic performance. Conversely, exchange rate movements exert a significant positive influence, indicating that currency dynamics play a key role in shaping development outcomes. The model demonstrates strong explanatory power and reliability. The study concludes that Nigeria’s economic development is highly sensitive to macroeconomic volatility and emphasizes the need for stronger policy coordination, institutional reforms, financial-market strengthening, and economic diversification to support sustainable developmen