Abstract
This study makes a unique contribution by delving into the primary economic factors that led to Nigeria’s economic recession. It does this by scrutinizing the bond yield and social progress, areas previously overlooked in related studies, and taking into account the country’s population growth. We collected secondary data from the World Bank from 1989 to 2020 and analyzed it using a quantitative approach. The unit root test indicates that the unit root that could lead to an erroneous conclusion was eliminated to facilitate further econometrics analysis. The cointegrating analysis reveals evidence of cointegration, leading to the specification of VECM, a measure that confirms the long-term association among variables. The finding of this study based on OLS regression, reveals that while inflation has a negative impact on, the social progress index shows a positive impact on Nigeria’s economic performance. It is concluded that both inflation and social progress modelled Nigerian economic development but differently. Therefore, the government must meet the social and environmental requirements necessary for the Nigerian population. This will create an enabling environment that will attract foreign investors to invest in the economy and enhance the growth of locally manufactured goods, ultimately leading to the recovery of the Nigerian economy from recession.
Keywords: GDP, Inflation, Social Progress, VECM