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ABSTRACT
The main objective of this project work is to examine the relationship between financial deepening and Industrial development in Nigeria and Kenya. The study utilized secondary data most from the world development indicators – data bank. The data were analysed using the Augmented Dickey Fuller test, Johansen co-integration test and the Error Correction Model (ECM). The result revealed that financial deepening which was proxied by money supply (M2) impacted positively on industrial development both in Nigeria and Kenya. Financial deepening impacted more significantly on industrial output in Kenya than in Nigeria. A bi-directiomal causality between financial deepening and industrial output was also established in Nigeria and Kenya. The study therefore recommends that there should be increased financial system development to make available more funds to be accessed by the industrial sector and that there should be alignment between the policies of the Ministry of Finance and the Ministry of Trade and Industry.
