GOVERNANCE QUALITY AND ECONOMIC GROWTH IN NIGERIA

Abstract

This study examined the effect of governance quality on economic growth in Nigeria. The study used annual time series data covering the period of 1999 to 2023; Augmented Dickey Fuller (ADF) and Phillips Perron (PP) unit root test was carried out and the result revealed that all the variables were integrated at level I(0) and first difference I(1). Governance quality was proxied on government effectiveness, rule of law, control of corruption, regulatory quality, control of corruption, voice and accountability while gross domestic product growth rate was used as proxy for economic growth. Consequently, the ADF bound test was employed and the result revealed the existence of long-run relationship between governance quality and economic growth. The Auto-Regressive Distributed Lag (ARDL) model was adopted for the study, and it was found that government effectiveness, political stability, rule of law, control of corruption, voice and accountability were statistically insignificant while only regulatory quality had positive and significant effect on growth in Nigeria. The overall finding revealed that governance quality has significant effect on economic growth in Nigeria. The study therefore recommended that; the existing regulatory institutions of the government should be strengthened and given the full authority and independence to design and implement policies that will encourage hard work, sincerity and dedication which will spur productivity and output. More so, appointments into these regulatory agencies should be on merit and not partisanship. This will propel those who are saddled with the responsibility to perform to the best of their ability that will match with the confidence reposed in them.