Impact Of Financial Development On Economic Growth In Nigeria

Abstract

This study assessed the impact of financial development on economic growth in Nigeria using time series data spanning from 1981 to 2021. The ex-post facto research design was adopted and the data used were sourced from the World Bank Development Indicator database. The data were analysed using Autoregressive Distributed Lag Model (ARDL) bounds cointegration approach. The long-run result shows that financial development contributes positively to economic growth in Nigeria for the period under review while inflation and unemployment impact negatively on economic growth. In the short-run, broad money supply contributes negatively to economic growth in Nigeria. The estimated model passed all the diagnostic tests including structural stability. The study recommended proper monitoring of the financial system, ensure both financial and market stability to encourage investors, government should diversify the economy so that they can have multiple sources of revenue through improving the real sector