IIARD International Institute of Academic Research and Development

INTERNATIONAL JOURNAL OF ECONOMICS AND FINANCIAL MANAGEMENT (IJEFM )

E-ISSN 2545-5966
P-ISSN 2695-1932
VOL. 3 NO. 3 2018

---

Financial Sector Development and Economic Growth in Nigeria: An Econometrics Analysis, 1981-2017

Oladele Akeeb Olushola & Makwe Emmanuel Uzoma

---

Abstract

Sequel to the arguments among some scholars that those countries with effectively organized capital markets achieve faster and better economic growth more than other countries with more developed financial institutions, this study was carried out to examine the relationship between financial sector development and economic growth in Nigeria with a view to making relevant contributions to existing knowledge and suggestions that would enhance economic development of Nigeria. Time series data covering the period 1981 - 2017 were gathered from the Central Bank of Nigeria (CBN) Statistical Bulletin & Statement of Accounts and the Federal Bureau of Statistics. Total insurance income (TIY), total deposit money banks assets (DMBASST), total stock market capitalization (TSMC), and broad money supply (M2) as ratio of gross domestic product for each year were used as proxies that measure activities in the financial sector. The gross domestic product (GDP) for each year gave a measure of the performance of the economy or the output for that year. The data analysis was estimated using the ordinary least square regression. The model was subjected to Johansen Rank Cointegration technique to explore the long-run relationship between the variables. Augmented Dickey Fuller and Phillips-Peron tests were conducted to examine stationarity (unit root) to ascertain the order of integration of the variables followed by the error correction model (ECM) using general to specific modeling to obtain meaningful results. The t-tests showed that there is a positive (+ve) and significant relationship between total insurance income and economic growth in Nigeria. Also the model taken as a whole suggested that there is a positive and significant relationship between deposit money banks assets, stock market capitalization and economic growth in Nigeria. The broad money supply though had a significant impact on the economic growth of Nigeria, the effect is negative in the model. The researchers conclu

---

DOWNLOAD PDF

---

Back