IIARD International Institute of Academic Research and Development

Journal of Accounting and Financial Management (JAFM )

E-ISSN 2504-8856
P-ISSN 2695-2211
VOL. 10 NO. 12 2024
DOI: 10.56201/jafm.v10.no12.2024.pg254.278

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Time deposit and Nigeria's Economic Growth: A disaggregated Money Supply Impact Analysis

Odimgbe Jude Chijekwu (PhD), Ejitagha Stephen Eguonor

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Abstract

This study examined the effect of time deposit on the growth of Nigeria economy using time series data from 1994-2019. Data were sourced from Central Banks of Nigeria Statistical Bulletin real gross domestic product was modeled as the function of Private sector time deposit; State government time deposit and Local government time deposit. Ordinary Least Squares Regression was employed to reveal potential relationships between causes and effects of the independent variables on the dependent variable. The study found that 54.4% of changes in Real Gross Domestic Product can be explained by the independent variables represented as Private Sector Time deposit, State Government Time Deposit and Local Government Time deposit. The overall significance of the model is tested with F-statistic. The F-value is 6.561559 with p-value of 0.001238 implying a rejection of the Null hypothesis and the acceptance of the alternative (HA) hypothesis that all the explanatory variables collectively have significant influence on real gross Domestic Product. The Durbin Watson statistic (1.879279) is approximately 2 indicating that the model is not characterized by autocorrelation and therefore suitable for the analysis. Error Correction Co-efficient of -0.273634 is properly signed, and significant at 5% level of significance with (0.0001) p-value. The co-efficient showed that the speed of adjustment of the model is approximately 27.36 percent annually due to a deviation from equilibrium. From the findings, the study concludes significant effect of time deposits on Nigeria economic growth. It recommends that more incentives need to be in place to discourage leakages and high volatility of time deposit towards improved growth of the local economy. More credit facilities should be granted from time deposits to boost employment and output.

keywords:

Time Deposits, Economic Growth, Money Supply, Nigeria

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