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Abstract

Achieving the 2030 sustainable development goals (SDGs) in Nigeria requires sustainable and inclusive economic growth. There is no consensus among economists on the effect of monetary policy on economic growth. The results of previous studies on the effect of monetary policy on economic growth in Nigeria are mixed. The main objective of this paper is to evaluate the effect of monetary policy on economic growth in order to ascertain if monetary policy can be used to achieve SDGs in Nigeria. The effect of monetary policy on economic growth in Nigeria from 1991 to 2020 was evaluated using ordinary least squares regression model. The findings indicated that there is long-run relationship between economic growth and money supply, treasury bill rate and domestic credit provided by banks in Nigeria. The money supply and domestic credit provided by banks had significant positive effect on economic growth; and short-term policy interest rate had significant negative effect on economic growth in Nigeria in line with economic theory. Monetary policy is a veritable tool that can be used to achieve SDGs in Nigeria. Economic growth will increase and SDGs will be achieved in Nigeria if money supply and domestic credit provided by banks are increased and short-term policy interest rate is reduced. Increasing economic growth touches on the objectives of monetary policy of the Central Bank of Nigeria and calls for radical and proactive monetary policy towards achieving SDGs.
 
Keywords: Monetary Policy, Economic Development, Ordinary Least Squares Model,Nigeria
JEL Classification: C01, E52, O11