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This study examined the determinants of private sector in Nigeria for the period of 1981-2018. The main objective of this research work is to determinants of private sector in Nigeria. The study used Auto-Regressive Distributed Lag (ARDL) to examine the relationship between the dependent and independent variables.. The study found that the Gross domestic product growth rate from the analysis was found to be negatively and insignificantly related to private sector credit in Nigeria in the long run. Also, Exchange rate from the analysis is positively and insignificantly related to private sector credit in Nigeria in the long run. Also, interest rate from the analysis is positively and significantly related to private sector credit in Nigeria in the long run. Domestic debt (DMD) from the analysis is negatively and significantly related to private sector credit in Nigeria in the long run. Also, Gross Domestic Savings (GDSAV) from the analysis is negatively and insignificantly related to private sector credit in Nigeria in the long run. Finally for the long run, GDP from the analysis is positively and significantly related to private sector credit in Nigeria. In the short run, private sector credit in the previous year is found to be positively and significantly related to private sector credit. Also, private sector credit in its two year lagged form is negatively and significantly related to private sector credit. Also, Gross domestic product growth rate in the period under consideration from the analysis is negatively and significantly related to private sector credit in Nigeria during the period under consideration. Also, Gross domestic product growth rate in the previous year from the analysis is negatively and significantly related to private sector credit in Nigeria during the period under consideration. Also, The two year lag of Gross domestic product growth rate from the analysis is negatively related to private sector credit and significantly in Nigeria during the period under consideration. Also, Exchange rate from the analysis is positively and insignificantly related to private sector credit in Nigeria during the period under consideration. Interest rate in the current period from the analysis is positively and significantly related to private sector credit in Nigeria during the period under consideration. In addition to that, Interest rate in the previous year from the analysis is negatively and insignificantly related to private sector credit in Nigeria during the period under consideration. Domestic debt (DMD) from the analysis is negatively and significantly related to private sector credit in Nigeria during the period under consideration. Gross Domestic Savings (GDSAV) in the current period from the analysis is negatively and significantly related to private sector credit in Nigeria during the period under consideration. Gross Domestic Savings (GDSAV) in its two year lagged form is negatively and insignificantly related to private sector credit in Nigeria during the period under consideration. GDP in the current period and previous year from the analysis is negatively related to private sector credit in Nigeria during the period under consideration. The study recommends that the government of Nigeria working through the central bank of Nigeria (CBN) should finance the real sector as well as improve private credit flow to the sector because of its strategic importance in creating job opportunities and encouraging labor participation rate. Also, government should formulate policies that would increase bank lending activities so as to promote capital availabilities among intending private investors. One of the major ways government can achieve this is by formulating expansionary monetary policies the open market operation.
