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INFLUENCE OF INTEREST RATE STRUCTURE ON ECONOMIC GROWTH IN NIGERIA

Izuchukwu Ogbodo·John Amobi Ogbodo·Ozoemena Christian Okafor
Published 17 March 2026
DOI: https://doi.org/10.5281/zenodo.20086138
Vol. 14, No. 1 (2026)
pp. 55-72
CC BY 4.0
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Authors & Affiliations
  1. 1
    Izuchukwu Ogbodo
    Department of Banking and Finance, Enugu State University of Science and Technology, Enugu
  2. 2
    John Amobi Ogbodo
    Department of Cooperative Economics and Management, Enugu State University of Science and Technology, Enugu
  3. 3
    Ozoemena Christian Okafor
    Department of Marketing, Enugu State University of Science and Technology, Enugu
Abstract
This study examined the effect of interest rates on the economic growth of Nigeria between 1981 and 2024. The specific objectives were to assess the effect of the prime lending rate, monetary policy rate, and savings interest rate on real gross domestic product (RGDP). The study employed an ex-post facto research design and used the Ordinary Least Squares (OLS) method for hypothesis testing, supported by unit root and descriptive analyses. The findings revealed that the prime lending rate had a positive and significant effect on RGDP, the monetary policy rate also showed a positive and significant effect, while the savings interest rate had a positive but non-significant effect on RGDP within the period under review. Based on these results, the study recommended that the Central Bank of Nigeria and commercial banks ensure that prime lending rates remain stable and affordable for productive sectors such as agriculture, manufacturing, and SMEs. It further suggested that monetary authorities use the monetary policy rate proactively to stimulate economic activity, while policies should be designed to strengthen the link between savings and investment through competitive savings rates and financial inclusion strategies. This study contributes to literature by providing updated evidence on the role of interest rate components in Nigeria’s economic growth.
Article Information
JournalJournal of Financial Economics and Management
ISSN3065-0534
Volume / IssueVol. 14, No. 1 (2026)
Pages55-72
Published17 March 2026
DOIhttps://doi.org/10.5281/zenodo.20086138
Access Open Access
LicenseCC BY 4.0 — reuse with attribution
PublisherKeith Publications
How to Cite
Ogbodo, I., Ogbodo, J., Okafor, O. (2026). INFLUENCE OF INTEREST RATE STRUCTURE ON ECONOMIC GROWTH IN NIGERIA. Journal of Financial Economics and Management, Vol. 14 No. 1, pp. 55-72. DOI: https://doi.org/https://doi.org/10.5281/zenodo.20086138
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