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Journal of Social Economics Research

June 2018, Volume 5, 2, pp 39-50

Macroeconomic Indicators and Capital Formation Growth in Nigeria: A New Evidence

Anthony Orji


Jonathan E. Ogbuabor


Onyinye I. Anthony-Orji


Mbonu Chibudem O.

Anthony Orji 1 Jonathan E. Ogbuabor 1 Onyinye I. Anthony-Orji 1 ,
Mbonu Chibudem O. 4

  1. Department of Economics, University of Nigeria, Nsukka, Nigeria 1

  2. Department of Economics, Enugu State University of Science and Technology, Nigeria 4

Pages: 39-50

DOI: 10.18488/journal.35.2018.52.39.50

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Article History:

Received: 16 August, 2018
Revised: 20 September, 2018
Accepted: 23 October, 2018
Published: 26 November, 2018


This paper estimates the impact of macroeconomic indicators on the growth of capital formation in Nigeria. Adopting the Autoregressive Distributed Lag Model (ARDL), the empirical findings showed that Foreign aid which is proxied by Overseas Development Assistance (ODA) and Domestic Private Investment (DPI) had positive impact on capital formation growth in Nigeria, while exchange rate, trade openness, and external debt had negative impact for the period under review. The study therefore recommends that aid, especially from the West should not be highly depended upon as a major source of revenue for the development of the economy. Other macroeconomic determinants of capital growth that government should encourage include; savings, investment and the quality of institutions.
Contribution/ Originality
This study tests the impact of macroeconomic indicators on the growth of capital formation in Nigeria within the framework of the Autoregressive Distributed Lag Model (ARDL).


Macro indicators, Capital formation, Foreign aid, Domestic private investment, Real exchange rate


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This study received no specific financial support.

Competing Interests:

The authors declare that they have no competing interests.


All authors contributed equally to the conception and design of the study.

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