Abstract
This study investigates the impact of some key macroeconomic indicators on Economic Growth in Nigeria using a multiple linear regression framework. Specifically, it models Real Gross Domestic Product (RGDP) as a function of Labour Force, Savings Accumulation, and Gross Fixed Capital Formation, using annual data. The model was evaluated using standard regression diagnostics including ANOVA, coefficient significance, variance inflation factors (VIF), and residual analysis. Initial results reveal that Labour Force and Gross Fixed Capital Formation significantly affect RGDP at the 1% level, while Savings Accumulation is statistically insignificant. However, high VIF values indicate multicollinearity among the predictors, particularly with Savings Accumulation, which was eventually excluded to improve model reliability. The final model explains approximately 67% of the variation in RGDP, with Labour Force showing a strong positive influence, consistent with economic growth theory. Gross Fixed Capital Formation exhibited a statistically significant but negative relationship with RGDP, reflecting inefficiencies in capital allocation or institutional weaknesses in the management of public investments. Model diagnostics also identified several outliers and high-leverage points, notably Observations 33 and 197, which were found to disproportionately affect model estimates and were excluded from the refined model. This study underscores the importance of a productive labour force in driving economic growth in Nigeria, while also highlighting concerns regarding the efficiency of capital utilization and the limited role of domestic savings. It recommends that policymakers strengthen labour market participation and address structural inefficiencies in capital deployment to sustain and enhance economic growth. Further research could incorporate additional macroeconomic variables and explore non-linear modelling approaches for improved forecasting accuracy