Domestic Financial Investment, Resource-Backed Capital Flows, and Economic Growth in Niger: An ARDL Approach

Using the Autoregressive Distributed Lag (ARDL) model cointegration framework, this paper examines the long- and short-run impact of domestic financial investment and natural resource rents on economic growth in Niger within the period 1990–2021. The Bounds test confirms a long-run relationship among variables: F = 4.646 > 3.79 at 5%. Long-run results indicate that increasing domestic investment by 1% raises real Gross Domestic Product (GDP) per capita by approximately 0.30%, whereas 1% increase in natural resource rents leads to a reduction in growth by approximately 0.06%. At the same time, exports have a positive but very small effect, while imports and labor have negative long-run influences. Short-run dynamics further support a significant positive impact of domestic investment, at p = 0.0007, and a lagged effect of natural resources at p = 0.0308. The error-correction term is negative and significant, at −0.75, showing rapid adjustment toward equilibrium. Diagnostic tests confirm an absence of serial correlation and heteroskedasticity, while stability is confirmed by CUSUM and CUSUMSQ tests. The findings reveal a dualism in the growth path of Niger in that domestic financial investments favor sustainable expansion, whereas resource-based revenues undermine the growth process in the long run and call for financial market deepening and improved governance of resource revenues.