Monetary Policy Transmission Mechanisms and Economic Growth in Nigeria: An Empirical Investigation (1999-2021)

This study evaluated monetary policy transmission mechanisms and economic growth in Nigeria: an empirical investigation (1999-2021). This research focused on analyzing the channels through which monetary policy affects economic growth in Nigeria. The study explored how changes in monetary policy instruments (e.g., interest rates, money supply) influence key macroeconomic variables and contribute to overall economic growth. Hence, the specific objectives of this study are; to examine the impact of broad money supply (M2) on gross domestic product in Nigeria; to investigate the influence of credit supply to private sector (CPS) on gross domestic product in Nigeria; to ascertain the effect of interest rate on gross domestic product in Nigeria. Data were gotten from CBN Statistical Bulletin. Ex-post facto were employed for the research design. Ordinary Least Square of multiple regression were used to test research hypotheses. The results revealed that Broad money supply (M2) had positive and significant effect on the gross domestic product in Nigeria; coeff was 0.316889 while the probability value is 0.0000. Credit supply to private sector (CPS) had positive and significant effect on the gross domestic product in Nigeria; coeff was 0.273877 while the probability value is 0.0000. Interest Rate had positive and non-significant effect on the gross domestic product in Nigeria; coeff was 0.039057 while the probability value is 0.0671. Therefore, this study recommended that Contraction of monetary policy variables like narrow money and broad money should be done to reduce much influx of money in the economy. Federal government through the monetary authorities should revive all monetary policies that affect all sectors in the economy. They should eliminate the ones having little or no effect and modify the significant ones, also taking into consideration the relevance of creating new policies designed for the growth of the economy as a whole