Title: Financial Repressions And Economic Growth In Nigeria
Authors: EMMANUEL, Evidence Osaro, EHIEDU, Victor C Ph.D
Volume: 9
Issue: 5
Pages: 182-197
Publication Date: 2025/05/28
Abstract:
This study examined the impact of financial repression on Nigeria's economic growth using annual time series data from 1990 to 2024. Financial repression was proxied by Real Interest Rate (RIR), Government Domestic Debt as a Percentage of GDP (GDDGDP), Statutory Reserve Requirements (SRR), and Lending Rate Ceilings (LRC), while economic growth was represented by the Real GDP Growth Rate (RGDPR) and the data were sourced from the Central Bank of Nigeria's Statistical Bulletin, Annual Reports, and World Bank indicators.. Employing an ex-post facto research design and the ARDL bounds testing approach, the study analyzed both short-run and long-run effects of financial repression indicators on economic growth. Descriptive statistics and diagnostic tests confirmed the adequacy of the model. The results showed that none of the financial repression variables had a statistically significant effect on RGDPR in either the short or long run: RIR (p = 0.8906), GDDGDP (p = 0.2613), SRR (p = 0.9299), and LRC (p = 0.2626) in the long run; and RIR (p = 0.8910), GDDGDP (p = 0.2487), SRR (p = 0.9301), and LRC (p = 0.2662) in the short run. However, the error correction term was negative and highly significant (p = 0.0000), confirming the existence of a long-run equilibrium relationship among the variables. These findings suggest that although financial repression tools interact with economic growth over time, their individual effects may be muted due to structural inefficiencies or policy overlap. The study recommends reforming interest rate policy, improving debt management, adopting flexible reserve requirements, and reviewing credit ceiling regulations. The research contributes to the growing body of literature by offering contemporary empirical insights into the relationship between financial repression and economic growth in Nigeria and calls for more nuanced models and sectoral investigations in future studies.