Abstract:
This study investigates the impact of Foreign Exchange Management on the Nigeria economy since the adoption of the Structural Adjustment Program in 1986 c"> • 0/ which Foreign Exchange Management was a key policy variable. The study used 23years annualized data (1986-2008) to estimate the necessary parameters. Economic growth; proxied by Gross Domestic product; Balance of Payment, Domestic Price Indices (Inflation) and Foreign Direct Investment were adopted as the dependent variables while Foreign Exchange growth rate was adopted as the independent variable. The regression results showed that the co-efficient of Foreign Exchange Rate are not positive and significant in explaining changes in Gross Domestic product. The analyses also reveal that the co-efficient of exchange rate on Inflation is also not positive and significant. The co-efficient of Foreign Exchange Rate on Balance of Payment was found to be negative and not significant. Finally, the impact of Exchange Rate on Foreign Direct Investment was also not positive and significant. These results therefore support the thesis that Foreign Exchange Management in Nigeria has not been effective in the period under review. 111e study also reveals that policy inconsistency rather than policy inappropriateness was responsible f or 'he poor impact. The major recommendations of the research include; multi disciplinary and exhaustive policy study before adoption, positive Machiavellianism, avoidance of executive cowardice, mungolization and a shift in economic management paradigm.
