Impact of Financial Deepening on Economic Growth in Nigeria.

Kayode David (P.h.D.) KOLAWOLE, Muftau. Adeniyi (Prof.) IJAIYA, Mubaraq (Ph.D.) SANNI, Taiye John AINA

Abstract

This study examined the impact of financial deepening on economic growth in Nigeria. The study employed secondary data obtained from the Central Bank Statistical Bulletin. Error correction model was used to achieve the objectives of this study. Results of the regression analysis revealed that banking sectors related financial deepening variable is a significant determinant of economic growth in Nigeria with coefficient value of 726.2735 and at 1% significant level. The findings of the study further revealed that capital market related financial deepening variable is a significant determinant of economic growth in Nigeria with coefficient value of 1021.473 and at 1% significant level. Finally the result of the study revealed that insurance related financial deepening variable is a significant determinant of economic growth in Nigeria with coefficient value of 11.57532 and at 5% significant level. The study concluded that financial deepening promotes economic growth in Nigeria. The study therefore, recommends that policy holders should implement policies that increases the flow of investible funds, improves the capacity of banks to extend credit to the economy and also promote an efficient capital market that will enhance overall economic efficiency.

 

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