TABLE OF CONTENTS
Title Page – – – – – – – – – i
Certification – – – – – – – – – ii
Dedication – – – – — – – – – iii
Acknowledgements – – – – – – – – iv
Table of Content – – – – – – – – vi
Abstract – – – – – – – – – – ix
CHAPTER ONE
CHAPTER TWO: LITERATURE REVIEW
2.0 Introduction – – – – – – – – – 7
2.1 Conceptual Framework – – – – – – – 7
2.1.1 Exchange Rate Management in Nigeria – – – – 9
2.1.2 Balance of Payment in Nigeria – – – – – – 12
2.2 Theoretical Framework – – – – – – – 14
2.2.1Theories of Exchange Rate – – – – – – – 15
2.2.2 Theories of Balance of Payment – – – – – – 17
2.3 Empirical Literature – – – – – – – – 20
2.4 Limitation of Previous Studies – – – – – – 23
CHAPTER THREE: RESEARCH DESIGN AND METHODOLOGY
3.1 Theoretical Framework – – – – – – – 24
3.2 Methodology- – – – – – – – – – 24
3.3 Model Specification – – – – – – – – 24
3.4 Method of Evaluation – – – – – – – – 26
3.4.1 Preliminary Tests – – – – – – – – 26
3.4.2 Stationarity (Unit Root) Test – – – – – – 26
3.4.3 Co-integration Test – – – – – – – – 26
3.4.4 Error Correction Mechanism – – – – – – 27
3.4.5 Economic Test of Significance (A Priori Test) – – – 27
3.4.6 Statistical Test of Significance (First Order Test) – – – 28
3.4.7Test for Goodness of Fit – – – – – – – 28
3.4.8 t-Test of Significance – – – – – – – 28
3.4.9 f-Test of Significance – – – – – – – 29
3.4.10 Econometric Test of Significance (Second Order Test) – – 29
3.4.11 Autocorrelation Test: Autocorrelation Test – – – – 29
3.4.12 Normality test – – – – – – – – 30
3.4.13 Granger Causality Test – – – – – – – 30
3.5 Data Required and Sources – – – – – – – 31
3.6 Economic Package Used – – – – – – – 32
CHAPTER FOUR: PRESENTATION AND ANALYSES OF RESULT
4.1 The Empirical Results – – – – – – – 33
4.1.1 Unit Root Test Results – – – – – – – 33
4.1.2 Co-integration Test Result – – – – – – 34
4.1.3 Error Correction Mechanism Result – – – – – 35
4.2 Regression Result – – – – – – – – 36
4.3 Evaluation of Regression Results – – – – – – 37
4.3.1 Evaluation Based on Economic Criterion – – – – 37
4.3.2 Evaluation Based On Statistical Criterion – – – – 38
4.3.2.1 R2 –Result and Interpretation – – – – – – 38
4.3.2.2 t–Test Result and Interpretation – – – – – 38
4.3.2.3 Result of f–Test of Significance – – – – – 39
4.3.3 Evaluation Based on Econometric Criterion – – – – 39
4.3.3.1 Result and Interpretation of Autocorrelation Test – – 39
4.3.3.2 Result and Interpretation of Normality Test – – – – 40
4.3.3.3 Granger Causality Test: Result and Interpretation – – – 41
4.4 Evaluation of Research Hypotheses – – – – – 42
4.4.1 Hypotheses one – – – – – – – – – 42
4.4.2 Hypothesis two – – – – – – – – 42
4.4.3 Hypotheses three – – – – – – – – – 42
4.5 Implication of the Results – – – – – – – 42
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION
5.1 Summary of Findings- – – – – – – – 44
5.2 Conclusion – – – – – – – – – 44
5.3 Recommendations – – – – – – – – 44
References – – – – – – – – – – 46
Appendix I — – – – – – – – – – 49
Appendix II – – – – – – – – – – 51
Appendix III – – – – – – – – – 52
Appendix IV – – – – – – – – – 53
Appendix V – – – – – – – – – – 54
Appendix VI- – – – – – – – – – 55
Appendix VII – – – – – – – – – 56
Appendix VIII – – – – – – – – – 57
Appendix IX – – – – – – – – – 58
Appendix X – – – – – – – – – – 59
Appendix Xi – – – – – – – – – 60
ABSTRACT
The study investigates empirically the impact of Exchange Rate on Balance of Payment in Nigeria. The broad objective of this study is; to determine the impact of exchange rate on Balance of Payment in Nigeria within the periods of 1981 to 2015. Annual time series data on Exchange Rate, Trade Openness, Import, Export and Balance of Payment from the Central Bank of Nigeria covering the period 1981 – 2015 were utilized. A model was constructed to incorporate Balance of Payment as the dependent variable, and exchange rate, Import, Export and trade openness as the independent variables and tested using the Ordinary least Square (OLS) Methods. The Stationarity (Unit roots) status of the series was examined using the appropriate statistics. Some of the assumptions of the OLS models were also tested to avoid spurious regression
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