Evaluating the impact of inflation on investment decisions in Nigeria

Chukwu, Ugbaja Okafor (2025) Evaluating the impact of inflation on investment decisions in Nigeria. World Journal of Advanced Research and Reviews, 27 (1). 095-103. ISSN 2581-9615

This study examines the relationship between inflation and investment decisions in Nigeria using data from 2010-2024. Employing a comprehensive econometric approach including fixed effects regression, Vector Autoregression (VAR), and Granger causality tests, we analyze how inflationary pressures influence both private and public investment decisions. Our findings reveal a significant negative relationship between inflation and investment levels, with a 1% increase in inflation leading to a 0.65% decrease in private investment. The study contributes to the understanding of macroeconomic dynamics in emerging African economies and provides policy recommendations for maintaining price stability to foster investment growth.