FINANCIAL DEEPENING AND ECONOMIC GROWTH IN NIGERIA

FINANCIAL DEEPENING AND ECONOMIC GROWTH IN NIGERIA

ABSTRACT

Financial deepening has been found to promote economic growth by its ability to mobilize more investments thereby making financial resources readily available, and hence raises productivity. They are found important as they play intermediation role, by channeling funds from surplus units (savers) to deficit units (investors). The aim of this study investigated the relationship between financial deepening and economic growth from 1994 to 2015. The objectives of the study were to determine the relationship between commercial banks liquid liabilities and the economic growth, establish the relationship between credit to the private sector by commercial banks and the economic growth in Nigeria, establish the relationship between commercial and central banks‟ asset ratio and the economic growth in Nigeria, determine the relationship between commercial bank deposits and the growth of economy in Nigeria and to determine the causal linkage between financial deepening and economic growth in Nigeria. The research design was a causal and longitudinal research designs. The target population was all the 21 commercial banks in Nigeria excluding bank under receivership. Due to the manageability of the population, the researcher did a census study. The study used secondary data collected from published documents of the Nigeria Bureau of Statistics and Central Bank of Nigeria. The study employed cointegration test to determine the long run relationship between the variables and the study established that there was cointegrating relationship between the financial deepening indicators and economic growth, meaning there was a significant relationship between the financial deepening on economic growth in the long run.

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