Journal of Innovations

Vol. 4, Issue 6

Financial Intermediation–Economic Growth Nexus: Empirical Evidence from Nigeria

AUTHOR(S)

Olufemi Adebayo OLURANTI and Taiwo Adewale MURITALA

ABSTRACT

This study examined the effect of financial intermediation on economic growth in Nigeria from 1985 to 2024. Autoregressive Distributed Lag (ARDL)/Bound testing to co-integration was used to establish the short run and long-run dynamic.  The study revealed a high speed of adjustment in the short run (Cointeq(-1) = (-0.3647) for the model. Similarly, the study revealed that in the long run, credit to private sector/GDP (β1 = 4305.9) and Oil rents (β6 = 2434.9, p = 0.4339) all established positively insignificant effect on economic growth in Nigeria at 5% significance level while inflation (β3 = -456.84, p = 0.5508) and political instability (β7 = -37828.2, p = 0.4256) all established negative but insignificant effect on economic growth. at 5% significance level. The study, therefore, recommends that the Central Bank of Nigeria (CBN) should shift policy focus from the quantity to the quality and direction of private credit; enhance the inclusive and productive nature of financial depth as well as strictly adhere to limits on ways and means financing to prevent inflationary, growth-eroding money supply expansion.  

DOI

https://doi.org/10.62470/5f266598 

CITE THIS ARTICLE 

Oluranti, O. A. and Muritala, T. A. (2026). Financial Intermediation–Economic Growth Nexus: Empirical Evidence from Nigeria. Journal of Innovations, 4(6), 87-116. https://doi.org/10.62470/5f266598