Financial Sector Development and Economic Growth in Nigeria

Abstract This study examines the relationship between financial sector development and economic growth in Nigeria from 1980 to 2024 using the auto-regressive distributed lag (ARDL) approach. The main goal is to empirically examine how various financial sector reforms influence Nigeria's economic growth. The study adopts two measures of financial sector development: financial depth (broad money supply (M2) as a ratio of GDP, loans from the banking sector to the private sector as a ratio of GDP). We conducted the unit root test using the Philips-Perron stationarity test, revealing that certain variables remain stationary at the level, others after the initial difference, and none-integrate to the second order....