FINANCIAL DEVELOPMENT AND ECONOMIC GROWTH IN NIGERIA

ABDULKAREEM ALHASSAN; SHUAIBU SIDI SAFIYANU; USMAN ABDULRAHMAN ABDULRAHMAN

doi:10.70382/10.70382/sjmscd.v8i7.023

Authors

ABDULKAREEM ALHASSAN, Ph.D Department of Economics, Federal University of Lafia, Nigeria Author
SHUAIBU SIDI SAFIYANU, Ph.D Department of General Studies, Isa Mustapha Agwai I Polytechnic Lafia, Nasarawa State, Nigeria Author
USMAN ABDULRAHMAN ABDULRAHMAN Department of Economics, Federal University of Lafia, Nigeria Author

DOI:

https://doi.org/10.70382/10.70382/sjmscd.v8i7.023

Keywords:

Financial Development, Economic Growth, Error Correction Model, Trade Openness, Nigeria

Abstract

This work, which deviates from previous research by employing several econometric methodologies to analyze the financial growth link between 1990 and 2022, attempts to investigate the relationship between financial development and economic growth in Nigeria. The results show that, over time, financial development and economic expansion go hand in hand. Economic growth is significantly influenced by financial development and inflation, while trade openness has little discernible effect on the latter. Consequently, we recommend that steps be made to ensure that credit extended to the private sector is not misdirected or misallocated, but rather is used in areas of the economy that are genuinely productive. Over time, this will lead to increased output for export and domestic consumption. Trade openness will consequently rise significantly and continue to have a positive, long-lasting effect on the economy.