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. 7 NO. 2 2022

---

Financial Liberalization and Some Selected Macroeconomic Variables in Nigeria

Okore Amah Okore, PhD

---

Abstract

The aim of the study was to determine the impact of financial liberalization on some selected macroeconomic variables in the Nigerian economy. The specific objectives were to: examine the impact of interest rate and exchange rate liberalization on investment in Nigeria, assess the impact of interest rate and exchange rate liberalization on savings in Nigeria, analyze the impact of interest rate and exchange rate liberalization on inflation in Nigeria, evaluate the impact of interest rate and exchange rate liberalization on financial depth in Nigeria and determine the impact of interest rate and exchange rate liberalization on Gross Domestic Product (GDP) in Nigeria. The ex-post facto research design was adopted to enable the researcher make use of secondary data to determine the cause-effect relationship of financial liberalization on the selected macroeconomic variables. The data were sourced from the Central Bank of Nigeria Statistical Bulletin and Federal Bureau of Statistics. The study covered a period of thirty-one years, 1986 to 2016. The study conducted the stationarity test to guarantee a non-spurious result, the co-integration test to capture the equilibrium long-run relationship between the variables and employed the error correction mechanism to reconcile the short-run behaviour of the chosen variables with its long-run behaviour. Tests were conducted to clearly ascertain the causality between financial liberalization and the selected macroeconomic variables. The data were tested and analyzed at 5% level of significance. The study found that Interest rate liberalization had negative and significant impact on investment while exchange rate liberalization had positive and significant impact on investment in Nigeria, Interest rate and exchange rate liberalization had negative and significant impact on savings in Nigeria, Interest rate liberalization had negative and significant impact on inflation while exchange rate liberalization had p

keywords:

Financial Liberalization, Macroeconomics, Variables

---

References:

Akpan, D. B. (2004). Financial Liberalization and Erogenous Growth: The case of Nigeria.
African Institute for Development and Planning, Senegal. http://www.unidep.org.
Accessed on January 12th, 2015.

Gemech, F. & Struthers, J. (2003). The McKinnon-Shaw Hypothesis: Thirty Years on–a Review
of Recent Development in Financial Liberalization Theory. Paper presented at the
Development Studies Association annual conference on globalization and development,
Glasgow

Gujarati, D. N. 2003. Basic Econometrics. 4th Edition. Mcgraw-Hill, International Edition. New
York, U S A.

Ikeora, J. J. E.; Igbodika, M. N. & Jessie, I. C. (2016). Financial Liberalization Economic And
Growth in Nigeria (1987-2013). IOSR Journal Of Humanities And Social Science, 21(5):
123-132

McKinnon, R.I.(1973). Money and Capital in Economic Development, Washington D.C,
Brookings Institution.

Ogwuma, P.A. (1993). Recent Developments in the Nigerian Financial Services Industry:
Problems and Challenges. An Address at the Annual Dinner of the Chartered Institute of
Bankers of Nigeria, Lagos: Nigeria.

Ojo, M. O. (1993). Government Borrowing, Money Supply and Monetary Policy in Nigeria.
Lagos Press.

Orji, A.; Orji, O. A. & Mba, P. N. (2015). Financial Liberalization and Output Growth in
Nigeria: Empirical Evidence from Credit Channel, International Journal of Economics
and Financial Issues, 5(1):297-311

Shaw, E. (1973). Financial Deepening in Economic Development. New York: Oxford

Sulaiman, I.A., Oke, M.O. and Azeez, B.A. (2012) Effect of Financial Liberalization on
Economic Growth in Developing countries: The Nigerian Experience. International
Journal of Economic and Management Sciences, 1, 16-28.

DOWNLOAD PDF

---

Back