FINANCIAL DEVELOPMENT, ENERGY SUPPLY AND DOMESTIC INVESTMENT IN NIGERIA

This study examines the impact of financial development and energy supply on domestic investment in Nigeria. The data for the study range from 1990 to 2023 and were sourced from the World Development Indicator database. We used the autoregressive distributed lag (ARDL) estimator for the analysis. Empirical findings showed that credit to the private sector significantly impacts domestic investment in Nigeria. It was also revealed that access to electricity significantly impacts domestic investment in Nigeria. This demonstrates that funding for the private sector and adequate power generation improve the quality of the domestic investment in the economy of Nigeria. The study concludes that financial development and energy supply has a significant impact on domestic investment. The study therefore recommends that The Central Bank of Nigeria should formulate stabilisation policies concerning the exchange rate in a manner that will ensure that the risk to investments is minimised to the lowest level. Additionally, the restructuring of the financial sector to record more credit in the hands of the private sector must commence though the long run relationship between the reforms and investment is not as strong.