MONEY SUPPLY AND ECONOMIC DEVELOPMENT: EXPERIENCE FROM NIGERIA (2007- 2023)

Abstract

Money Supply is one of the initial economic concepts. It helps you to understand a nations monetary system. It depicts the sum of money in circulation; notes, coins and bank balances in circulation in an economy. A lot of reforms have taken place in Nigeria financial system and the reforms are geared towards financial stability and adequate funds in circulation in the economy. The paper studied the money supply and economic development: Experience from Nigeria (2007 to 2023). We applied Ex-post-facto research design in the study. The study adopted secondary data got from the Central Bank of Nigeria (CBN) statistical bulletin. The data gotten from CBN statistical bulletin was analyzed with the Ordinary least square (OLS) econometric technique and Granger causality tests. The variables tested are: Money Supply (MS) and Human development index (HDI) which proxied the economic development. The results from the OLS showed that Money supply positively but insignificantly affects the economic development in Nigeria while the Granger causality test revealed that no causality exists between HDI and MS. The study recommended that Central banks should continue to prioritize stability in monetary policy to ensure that fluctuations in the money supply do not lead to excessive inflation or deflation, Governments should adopt comprehensive economic policies that go beyond monetary measures alone, policymakers should consider targeted interventions and Government should ensure continuous monitoring and evaluation of the relationship between money supply dynamics and economic development