FINANCIAL INTERMEDIATION AND ECONOMIC DEVELOPMENT IN NIGERIA

ABSTRACT

This project work evaluated financial intermediation and economic development in Nigeria. The main objective of this study is to examine the interrelationship among credit to private sector, interest rate and economic development proxied by gross domestic product (GDP) in Nigeria. The study utilized aggregate annual data from 1980 to 2019. The data was analyzed with auto regressive distributed lag (ARDL) method and the bound test was conducted. The study finds out that credit to private sector has a positive effect on the real gross domestic product in Nigeria, bank reserve is also found to have a positive but insignificant effect on real gross domestic product in the short run and a positive relationship in the long run. Real interest rate has a positive and insignificant relationship on real gross domestic product in the long run. The paper recommended that Government and policy makers should be meticulous in appointment of finance heads/ministers.

Keywords: financial intermediation, development, economic performance, GDP, ARDL, Nigeria