Assessing the Contribution of Banking Sector Development to Real Gross Domestic Product Per Capita in Nigeria.

This study determines the effect of banking sector development on real gross domestic product per capita in Nigeria. The outcome variable is the log of real GDP per capita, while deposit-money banks' total assets, the bank lending–deposit spread, the commercial bank branches, and the logarithm of domestic credit to the private sector served as the independent variables. The time series data for the variables were obtained from the CBN Statistical Bulletin and the World Bank from 1990 to 2023. The analytical methods employed include descriptive statistics, ADF unit root tests, ARDL bounds cointegration, the ARDL estimation method, and post-estimation diagnostic tests. The ADF unit root results reveal a mixture of order I(1) and I(0) series. The ARDL long run results reveal that the deposit-money banks' total assets, the bank lending–deposit spread, the commercial bank branches, and the logarithm of domestic credit to the private sector are positive and statistically significant on real GDP per capita. Based on these findings, the study recommends, among other things, that the Nigerian government should scale public–private credit-guarantee schemes and catalytic funds that lower lenders' risk on productive SME and manufacturing loans, thereby unlocking sustainable private investment that contributes positively to real GDP per capita.