Title: The Relationship Between Financial Deepening And Economic Growth In Nigeria
Authors: MOKUOLU Joseph Oluseye and AYORINDE Babatunde Femi
Volume: 9
Issue: 9
Pages: 22-29
Publication Date: 2025/09/28
Abstract:
This research studied Nigeria's economic development and finance sector deepening from 1986 to 2022. Autoregressive distributed lag (ARDL) was employed as estimated technique. The study employed Gross Domestic Product (GDP) as a proxy for economic growth which is the dependent variable while percentage of money supply to gross domestic product and percentage of credit to private sector to gross domestic product as independent variable. The causality result revealed that there is a unidirectional relationship from LNGDP to MS_GDP, also, there is a unidirectional relationship from LNGDP to CPS_GDP. The direction of the flow comes from gross domestic product to percentage of money supply to gross domestic product, percentage of credit to private sector to gross domestic product and concluded that there is a unidirectional relationship from gross domestic product to percentage of money supply to gross domestic product, percentage of credit to private sector to gross domestic product. Thus, the central bank should lower interest rates and other economic basics to allow the financial sector, especially intermediaries, to do more business, commercial banks should encourage saving, and the Nigerian economy needs a higher liquidity threshold.