International Journal of Research in Social Sciences
Year : 2018, Volume : 8, Issue : 9
First page : ( 134) Last page : ( 145)
Online ISSN : 2249–2496.

Econometric Analysis on the Relationship between Financial Intermediation and Economic Growth in Nigeria

Mohammed, Badamasi Sani¹, Adamu Nasiru¹, Ladan Kabiru¹

¹Department of Economics, Isa Kaita College of Education, P.M.B. 5007, Dutsin Ma, Katsina

Online published on 5 August, 2019.

Abstract

This paper investigates the nexus between financial intermediation and economic growth in Nigeria for a period of thirty-one (31) years (1985–2016), using time series data for the sampled period, the conventional unit-root test conducted indicates that the variables of interest are integrated of order one I(1), cointegration analysis revealed the presence of a long-run relationship between financial intermediation which is proxy by the ratio of bank credit to the private sector, interest rate and economic growth in Nigeria, and causality test conducted on the granger frame-work indicates that causation stems from financial intermediation to economic growth in Nigeria. The study recommends that, long-term investment loan should be given to the priority sectors of the Nigerian economy at an affordable and attractive interest rate.

Top