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Banking Innovations and Industrial Sector Performance in Nigeria: Evidence from ARDL Model

Peter Ngbede Ajam, Abiodun Edward Adelegan, Benson Emmanuel

Abstract

The study investigated banking innovations and industrial sector performance in Nigeria. An Ex- Post Facto research design was adopted, utilizing monthly time-series data from 2010 to 2024, sourced from the Central Bank of Nigeria and the Nigerian Bureau of Statistics. The data were analyzed using descriptive statistics and the Autoregressive Distributed Lag model to capture both short-run and long-run dynamics. The study's diagnostic tests confirmed the stability and reliability of the models. Major results revealed a mixed but insightful picture. In the long run, ATMs had a significant positive effect on both agricultural (β = 0.0119, p < 0.01) and industrial (β = 0.4386, p < 0.01) GDP. However, Electronic Fund Transfers showed a negative long- run impact on agricultural GDP (β = -0.0391, p < 0.01) but a highly significant positive effect on industrial GDP (β = 0.9138, p < 0.01). Mobile banking and POS transactions generally had non- significant or mixed effects on both sectors in the long run. The study concluded that the impact of banking innovations is unevenly distributed across sectors, with the industrial sector benefiting more from structured digital finance tools. Based on these findings, it is recommended among others that policymakers prioritize the strategic deployment of ATMs in rural areas and tailor mobile banking and EFT platforms to the specific needs of the agricultural sector such as facilitating timely access to credit, improving payment systems for farm produce, and enabling insurance and subsidy disbursements to optimize their positive impact.

Keywords

Banking InnovationIndustrial SectorARDLElectronic Fund TransfersAgricultural GDPNigeria

References

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