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The Nigerian economy in the last two decades up until 2013 has been growing at an average of 6% and yet unemployment was equally growing in the region of 20% within the same period. This paradoxical situation has led to a flurry of studies and postulations aimed at providing explanation and solution to the phenomenon. This study making use of a regression model with annual data from 1980 to 2013, empirically determined the impact of public sector expenditures (CEXP and REXP) together with private sector investment (PINV) on unemployment (UNEMP) in Nigeria. Capital expenditure and private sector investment both in the medium to long-run were found to serve as catalyst towards reduction of unemployment, while recurrent expenditure was not statistically strong enough to do same. The R-2 (0.84) showed that greater proportion of the total variations in UNEMP was brought about by variations in the regressors. Further tests like autocorrelation, hetroscedasticity, specification error, and multicollinearity indicated respectively that there is no presence of autocorrelation hence the model produced a parsimonious result; the variance is constant over time; the link test confirmed by Ramsey reset test suggested there was no specification error; and lastly the variance inflation factor (VIF) of the variables implies that there is no evidence of multicollinearity. The study recommends, inter alia, that the proportion of capital expenditure in Nigerian budget profile should be systematically increased while the recurrent expenditure should be reduced; and there is need to stimulate competition among investors through removal of structural and institutional rigidities and government should design clear policy incentives to private sector investment.

The objective of this paper is to examine the relationship between the volatility of real exchange rate of own country and the G-3 countries (United States of America, Japan, and Germany/ or Euro zone) and the economic growth in developing countries. We draw a sample of African economies namely Nigeria, Kenya, Ghana, Malawi, Zambia and Mali and utilize quarterly data from the period 1980 -2013 which is divided into two periods 19802001 and 2002 – 2013. We apply the residual based cointegration test of Kao and Johansen –Fisher combined cointegration test to detect the long run relationships among the variables. Finally, we employ the Fully Modified Ordinary Least Squares of Philips and Hansen to estimate the long run coefficients of the model. The main results are: the long run relationships among the variables are strongly stable in the period 1980 – 2001 Original Research Article Onwuka and Obi; BJEMT, 6(1): 61-77, 2015; Article no.BJEMT.2015.043 62 but ambiguous in the period 2002 –2013. The financial system is underdeveloped and it negatively affects the economic growth in the selected African Countries. The own country’s real exchange rate volatility tends to depress the economic growth in both periods. The G-3 countries’ real exchange rate volatilities have mix results. While the Yen/Dollar and the Deutsche mark/Dollar improve economic growth, the Yen/Deutsche does not have any appreciable effect on economic growth in the developing African countries in the period 1980 2001. However, the period 2002 – 2013, the G-3 countries’ real exchange rate volatility tends to depress the economic growth in the developing African countries. These findings suggest that greater stability in international exchange rate system and lower G-3 currency volatility are desirable to promote higher growth in developing countries and which might reduce the possibility of occurrence of exchange rate crises.