EFFECT OF FINANCIAL SECTOR DEVELOPMENT ON ECONOMIC GROWTH IN NIGERIA

This study looks at how Nigeria's economic growth is impacted by the development of the banking industry. Deposit money bank loans to the agricultural sector, banking system liquidity, and real gross domestic product in Nigeria are the variables being studied. The data for these variables was taken from the Central Bank of Nigeria's Statistics Bulletin 2022, which covered the 42-year period from 1981 to 2022. Robust ordinary least square regression analysis was used to test hypotheses while descriptive statistics, Pearson correlation, skewness/kurtosis normality test, variance inflation factor (VIF), and heteroscedasticity test were used to examine the data using Stata 15. The findings demonstrated that, during the period under consideration, real gross domestic product in Nigeria was significantly positively impacted (0.000) by deposit money bank loans to the agricultural sector. The results also show that banking system liquidity has an insignificant negative effect (0.815) on real gross domestic product in Nigeria. The study recommends among others, that the Nigerian government should collaborate with regulatory bodies and financial institutions to create and implement policies that encourage and facilitate lending to the agriculture sector. The report also suggests that the Nigerian Central Bank use efficient monetary policy instruments to oversee liquidity levels in the banking system.

1 29 Mar, 2024

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JBMIC PORTAL SYSTEM

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