Title:
Private Sector Financing of Public Infrastructure, Exchange Rate Dynamics and, Economic Growth Process in Nigeria

Authors:
Charles Ogboi, Mercy Femi-Olagundoye, Olatunde Joshua Ogunwole, Nigeria

Abstract:

This study examined the nexus between private sector financing of public infrastructure, exchange rate dynamics and economic growth in Nigeria through the application of unit root, cointegration test, and granger causality. The result of the cointegration techniques suggests the existence of long run relationship among the variables. Granger causality result show that economic growth plays a pivotal role in driving infrastructure investment. However, the immediate feedback loop from infrastructure investment to economic growth is less clear, possibly due to the time lag inherent in the realization of infrastructure benefits. Other economic factors like interest rates, exchange rates, inflation, and FDI are influenced by broader macroeconomic and global conditions, showing less direct causality with infrastructure investment and economic growth in the short term. It is therefore recommended that Government at all levels must promote Public-Private Partnerships (PPP) to leverage private sector expertise and financing in infrastructure projects. Clear and transparent PPP frameworks will attract more private investments. Additionally, the Central Bank of Nigeria (CBN) should carefully manage interest rates to balance economic growth with inflation control. High interest rates can deter private investment, so a balanced approach is necessary

DOI: https://doi.org/10.51505/IJEBMR.2024.8805