Financial intermediation and economic growth nexus in Nigeria

The impact of financial intermediation on the growth of an economy has becomea controversial discuss among researchers with no unanimity. As the activities is said to be germane to economic development process some findings still comes out with it having an undesirable effect on the growth process of the nations studied. To take a stand therefore, this study observed the nexus between financial intermediation and economic growth process in Nigeria using data covering 1985 to 2023. While economic growth was taken as the explained variable other explanatory variables which were confirmed as important, through the various test carried out in the study, were used. After carrying out the unit root test and found to be a blend of first difference and levelssignificancy, analysis was done using an Auto Regressive Distributed Lag (ARDL) estimation technique. From the findings, it was discovered that financial intermediation activities influence economic progress. All the control variables present positive effect on economic growth, though not statistically significant except that of financial openness, with the exception of inflation which encumbers the development of the nation. Premised on this, suggestions weremade to the government to fortify regulatory basis controlling financial services in order to improve stability in the fiscal sector and also legislates practicable policy to keep inflation at bay so as to encourage both local and foreign investors to commit their investable fund to domestic market in other to boost productivity and growth, among others.