ABSTRACT

 This study centers on Evaluation of the effect of inflation on Nigerian Economy from 1998-2006. The project investigates the effect of inflation, and some other micro- economics variables as money supply, taxes on the Nigerian economy growth. Data for the research were collected from Central Bank of Nigeria statistical Bulletin vol. 17, 2006, and were analyzed using multiple regression analyses. The result of the finding is that inflation and tax have significantly affected the Nigerian economics growth GDP and that money supply does not significantly affect the Nigerian economy growth (GDP). Consequently, the following recommendations were made in the study which include: There should be strict adherence to CBN's monetary policy guidelines by both the public and private sector as this will help to arrest the problem of excess borrowing for speculative purchase of foreign exchange and also political stability and social security are pre-requisites for the conclusive environment that is• needed for policy continuity and effectiveness. Mandatory sectorial credit allocation should he imposed, so as to induce higher level of output there by restrain inflation. There is the need for government to diversity the economy from mono-products (oil) and embark on special programmes in agriculture to increase agric products/output, in order to reduce the prices of these products to restrain inflation. Government should scrap the policy of giving approval to certain un-official transaction to he funded at the official rate.