This study was aimed at investigating the behaviour of private investment in Nigeria. Using data covering the period between 1980 and 2011, the result of the parsimonious ECM indicates that the huge government expenditure on infrastructure has been beneficial to private investors in Nigeria. The result also indicates that private investment has been influenced by the international competitiveness of Nigeria as indicated by the significance of the Real Effective Exchange Rate. The high rate of inflation has however been detrimental to the development of private investment in Nigeria. The Johansen cointegration test supports the existence of a long run relationship among the variables and the negatively signed and significant ECM insinuates a satisfactory speed of adjustment. Government should thus intensify efforts to tackle the high rate of inflation and further increase the competitiveness of the economy.

In this paper, an attempt is made to investigate the determinants of the real exchange rate in Nigeria. The objective of the study has been to present a dynamic model of real exchange rate determination and empirically test the implications of changes in possible determinants of the real exchange in Nigeria. With data covering 1970-2010, the parsimonious ECM result shows amongst others that the ratio of government spending to GDP, terms of trade and technological progress are not important determinants of the real effective exchange rate in Nigeria. The result showed that capital flow, price level and nominal effective exchange rate are important determinants of the real effective exchange rate in Nigeria. The paper suggests that the Dutch Disease syndrome holds in Nigeria. The Johansen cointegration test suggests a long relationship among the variables. It is thus recommended amongst others that policies have to be put in place to stabilize the problem of inflation.

The objective of this paper empirically investigated the influence of interest rate on investment decisions in Nigeria. The cointegration technique with its implied ECM was applied to estimate the data which covered the period between 1980 and 2012. The result shows that while high minimum rediscount rate and high prime lending rates have detrimental impact on aggregate investment, high treasury bill rates and high government stock rates have positive and significant impact of the level of aggregate investment in Nigeria. The ECM result shows a satisfactory speed of adjustment and a long run relationship also exists among the variables. The study shows that interest rates have differential impact on aggregate investment. The result recommends amongst others that to increase aggregate investment, the minimum rediscount rate and the prime lending rate should be lowered.