BANKING SECTOR DEVELOPMENT AND PERFORMANCE OF THE NIGERIAN ECONOMY
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Date
2016-04-30
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Abstract
The study examines banking sector development and performance of the Nigerian
economy using time series data for the period 1988 to 2013. The study uses unit
root testto determine the stationary state of the variables. It also employs the
Johansson co-integration and error correction model (ECM) statistical
techniques to establish both short-run and long-run dynamic relationships
between the endogenous and exogenous variables. The findings reveal that total
number of banks (TNB), broad money supply (M GR) and interest rate had 2
negative effects on the performance of the Nigerian economy in the period
observed and were statistically insignificant. However,bank credit and bank
deposit have positive impact on economic growth and the relationships are
statistically significant in the short- run. The paper concludes that certain
banking sector variables positively promote economic growth in Nigeria.The
paper recommends that monetary authority, the Central Bank of Nigeria should
strengthen the banking sector by coming up with appropriate monetary and
regulatory policies that promote the financial intermediation role of banks and
ultimately banks' contribution to Nigerian economic growth
Description
Staff Publication
Keywords
Banking sector,, bank credit,, bank Deposit,, interest rate, financial Intermediation.