IIARD International Institute of Academic Research and Development

IIARD INTERNATIONAL JOURNAL OF BANKING AND FINANCE RESEARCH (IJBFR )

E-ISSN 2695-1886
P-ISSN 2672-4979
VOL. 10 NO. 4 2024
DOI: 10.56201/ijbfr.v10.no4.2024.pg50.67

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Responsiveness of Industrial Sector Growth to Commercial Banks’ Credit to Industrial Sector in Nigeria

Ozor, Kelechukwu C. PhD, Nwoko, Nnena Mercy, PhD and Efanga, Udeme Okon, PhD

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Abstract

This study is carried out to ascertain the responsiveness of industrial sector growth to commercial banks’ credit to industrial sector in Nigeria. The study made use of secondary data sourced from Central Bank of Nigeria Statistical Bulletin, World Bank development indicators and Nigerian Bureau of Statistics Bulletin. The ex-post facto research design was employed to ascertain how industrial sector growth response to commercial banks’ credit to the same sector in Nigeria. The study used Industrial contribution to Growth in Gross Domestic Product as the dependent variable while Bank Credit to the Manufacturing Sector at time, Bank Credit to Mining/Quarrying, Solid Minerals/Oil and Gas Sector, inflation rate and interest rate were used as the independent variables. Results of data analysis revealed that one-lag period in industrial growth (0.0000) had significant impact on industrial output growth in Nigeria from 1981 – 2023. Similarly, banks’ credit to mining, quarrying and solid minerals (Bmqs) at current (0.0418) and one-lag (0.0755) periods were statistically significant at 5% and 10% which means that it impacted positively on growth in industrial output. Correspondingly, inflation rate (infl) in the current (0.0009) and one lag (0.0006) periods had significant impact on growth in industrial output at 1% level of significance level. The researcher therefore recommended that government’s capital expenditure on social services other than bank credit should be tailored at providing basic infrastructures like power and good transportation networks that will attract potential and existing industrialists into the industry because the sector remains very vital to any economy. Equally important is the need for the government to revive our moribund textile industry that constitutes a reasonable chunk of our industries as well as either place a ban or increase the tariff on the importation of textiles into the country. These efforts will go a long way to reviving and creat

keywords:

Bank Credit, Industrial Sector, Manufacturing Sector, Gross Domestic Product, Interest Rate and Inflation Rate

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