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Real Sector Financing and Economic Growth in Nigeria

ANYIRA, Oluchukwu Favour, Prof OSUJI, Casmir Chinemerem

Abstract

This study examined the effect of real sector financing on Nigeria's economic growth, focusing on agricultural sector financing (AGPF), manufacturing sector financing (MAPF), solid mineral sector financing (SOMF), and services sector financing (SERF), with exchange rate (EXCR) and inflation rate (INFR) as control variables, covering the period from 1999 to 2023. Using secondary data from the Central Bank of Nigeria (CBN) and the World Bank, the study employs an Ex-Post Facto research design and econometric analysis, specifically Ordinary Least Squares (OLS) regression, to explore the relationships between sectoral financing and real gross domestic product (RGDP) Before conducting the OLS, the study carried out pre-diagnostics tests, such as Descriptive Statistics, Correlation Analysis, Variance Inflation Factors, Jarque Bera Probability Test, Breusch-Godfrey Serial Correlation LM Test, Heteroskedasticity Test: Breusch-Pagan- Godfrey, Ramsey RESET Test, Group unit root test and Johansen Cointegration Test in a bid to have a standardized regression results. The results revealed that AGPF, SOMF, and SERF significantly contribute to RGDP, while MAPF does not. Additionally, the EXCR and INFR were found to have no significant effect on RGDP. These findings underscore the importance of targeted investments in agriculture, solid minerals, and services for sustainable economic growth in Nigeria. Thus, concluded that the real sector financing has significant effect on Nigeria's economic growth. The study recommends that the government and financial institutions should prioritize agricultural sector financing, as it has a proven positive effect on Nigeria's economic growth. Increased agricultural financing can enhance food security, employment, and rural development and increased sectoral financing in these areas (solid mineral sector financing and services sector financing) and suggests further research into the mechanisms through which

Keywords

Real SectorFinancingAgriculturalManufacturingSolid MineralServices and

References

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