Journal of Research in Emerging Markets ISSN: 2663-905X Journal of Research in Emerging Markets,2020, 2(4);DOI: 10.30585/jrems.v2i4.446 https://publications.ud.ac.ae/index.php/jrems Article Exchange rate and economic growth nexus: An impact analysis of the Nigerian economy Lawali Bello Zoramawa 1 *, Machief Paul Ezekiel 2 , and Aliyu Tukur Kiru 3 1 Department of Economics, Sokoto State University, Nigeria ; Lawalbzoro@hotmail.com 2 Marketing Department, First City Monument Bank (FCMB), Birnin Kebbi, Kebbi State Nigeria; thispaul12@yahoo.com 3 Principal Planning Office Department for Sustainable Development Goals (SDGs), Ministry of Planning & Budget, Kano State, Nigeria; aliyutukurkiru@yahoo.com * Correspondence: lawalbzoro@hotmail.com; Tel.: (+2348065900202 Received: 22 January 2020; Accepted: 30 September 2020; Published: 5 October 2020 Abstract: This study examines the impact of the exchange rate, as an important determinant of economic growth in Nigeria between 1980 and 2019. Secondary data was used and sourced from the Central Bank of Nigeria (CBN) Statistical Bulletin 2016. The econometric techniques used in the analysis were: Unit Root Test, Johansen Cointegration Test, and Error Correction Model (ECM). The result revealed that exchange has a positive and statistically significant impact on economic growth at a 5% level of significance. But the result further revealed that economic openness was found to have impacted negatively on economic growth. Based on these findings it was recommended that the government through its monetary authority such as (CBN) should redesign the existing monetary policies to maintain a stable exchange rate. Lastly, since the economic openness hurts economic growth, it is therefore suggested that the government should sustain its current efforts in diversifying the economy in the country and disregard the notion that openness generates economic growth in the country. Keywords: Exchange Rate; Economic Openness; Economic Growth; ARDL; ECM JEL codes: F31, G15, O40 1. Introduction Several sources of economic growth have extended to include a stable exchange rate, economic openness to foreign participation, investment in physical capital, surplus labor and improvement in technological, foreign aid, investment in human capital, foreign direct investment (FDI), and increasing returns from investment and research and development. Does it matter if a country's national output rises or falls over time? For the many developing economies in West Africa, faced with many challenges particularly in growth problems the answer may be obvious. The importance of exchange rate stability in the attainment of macroeconomic policy objectives in both developed and developing economies cannot be overemphasized. Apart from being a relative price of one currency in terms of another, the exchange rate connects domestic and foreign markets for goods and assets, it also, signals the level of international competitiveness among currencies in the global market (Insah and Shiaraah, 2013). However, governments, particularly in developing economies over the years have adopted different exchange rate management policies to achieve a realistic and stable exchange rate. Thus, most of these countries experienced high exchange rate fluctuation which translates into a high degree of uncertainty or volatility. Exchange rate volatility is associated with unpredictable movements in the relative price of the economy. It also refers to the swings or fluctuations in the