ISSN: 2222-6990
Open access
The study investigated the effects of financial sector deregulation on economic growth of Nigeria using annual data spanning from 1970 to 2015. Real Gross Domestic Product (RGDP) were made as a function of Credit to Private Sector (CPS), Financial Sector Deepening (FDP), Real Interest Rate (RINTR), Real Exchange Rate (REXGR) and Financial Policy Shift (FPS). Data for the study were sourced from various issues of Central Bank of Nigeria Statistical Bulletin, National Bureau of Statistics. The data were analyzed using Co-integration for the existent of long-run relationship and Vector Error Correction Mechanism (VECM) for short-run dynamic of the model. Results derived from the Ordinary Least Square (OLS) indicated that real interest rate and real exchange rate are positive and insignificant, credit to private sector exhibit significant (prob < 0.05) relationship while financial sector deepening and financial policy shift are negatively related to gross domestic product. The long run model derived from the co-integration test revealed that there exists a long-run relationship between the variables. CPS, FDP and RINTR are negatively related to RGDP while REXGR and FPS are positively related to RGDP. The study concluded that the gain from financial sector deregulation in Nigeria has remained low in spite of the various reforms and institutional changes put in place by the monetary authorities. The study thus recommended an enhancement of private sector investment through financial sector credits and through a combination of macroeconomic stabilization policies which would surely enhance the performance of economic growth in Nigeria.
Adofu, I., Abula, M. & Audu, S. I. (2010). An Assessment of the Effects of Interest Rate Deregulation in Enhancing Agricultural Productivity in Nigeria. Current Research Journal of Economic Theory, 2(2), 82-86.
Ahmed, A. (1993). Forward to Central Bank of Nigeria: Perspectives of Economic Policy Reforms in Nigeria, Lagos: Page Publishers Services Ltd.
Akingunola, R. O., Adekunle, O. A., Badejo, O. & Salami, G. O. (2013). The Effect of the Financial Liberalisation on Economic Growth. International Journal of Academic Research in Economics and Management Sciences, 2(1), 123-155.
Durmus, O. & Can, E. (2008). Does Financial Liberalization Trigger long-run Economic Growth? Evidence from Turkey and Other Recent EU Members. A Paper Prepared for the EcoMod International Conference on Policy Modeling, Berlin, Germany, July 2-4, 2008
Emeka, E. E., Agoke, S. A. & Josephine, C. E. (2015). Effect of Interest Rates Deregulation on the Performance of Deposit Money Banks in Nigeria. International Journal of Managerial Studies and Research (IJMSR), 3(9), 164-176.
Hicks, J. A. (1969). A Theory of Economic History. Oxford: Clarendon Press, Ireland.
Honohan, P. (2000). How Interest Rates Changed under Financial Liberalization: A Cross-Country Review. Development Research Group, 1-48.
Ifeanyi, O. J. & Chukwu, N. G. (2014). The Nexus of Interest Rate Deregulation and Economic Growth in Nigeria. International Journal of Empirical Finance, 3(3), 142-151.
Imène B. F & Schalck C. (2010). Tunisian Financial System: A Growth Factor. International Journal of Economics and Finance, 2(5), 35-43.
Jalloh, M. (2011). Financial Deregulation and Economic Growth in ECOWAS Members State. Economic Policy Analysis Unit (EPAU) Research Paper Series 002/11, 1-36.
James, O., Richard, A. & Victor, A. (2013). Interest Rate Targeting: A Monetary Tool for Economic Growth in Nigeria? - Stakeholders’ Approach. Advances in Economics and Business, 1(2), 103-123.
Jhinghan, M. L (2003). Macro-Economic Theory, 11th Revised Edition, Delhi, Vrinda Publications (P) Ltd
Jhinghan, M. L (2005). Economics of Development and Planning, 38th edition, New Delhi Vikas Publishing House PVT Ltd
Johansen, S. (1988). Statistical Analysis of Co-integration Vector, Journal of Economic Dynamics and Control, 12, 231-254.
Johnansen, S. & Juselius, K. (1990). Maximum Likelihood Estimation and Inference on Co-integration, with Application to the Demand for Money. Oxford Bulletin of Economics and Statistics, 52(2), 169 – 210.
Mc Grath, P. (2005). Financial Deregulation and Economic Growth in the Czech Republic, Hungary and Poland. William Davidson Institute Working Paper Number 804 November 2005, 1-36.
Ndebbio, J. E., (2004). Financial Deepening, Economic Growth and Development: Evidence from Selected Sub-saharan African Countries. AERC Working Papers, 142.
Obamuyi, T. M. & Demehin, J. D. (2012). Interest Rate Reforms and Financial Deepening in Nigeria. The International Journal of Business and Finance Research, 6(2), 81-90.
Obamuyi, T. M. & Olorunfemi, S. (2011). Financial Reforms, Interest Rate behavior and Economic Growth in Nigeria. Journal of Applied Finance & Banking, 1(4), 39-55.
Obamuyi, T. M. (2009). An Investigation of Relationship between Interest Rate and Economic Growth in Nigeria (1970-2006). Journal of Economics and International Finance, 1(4), 093-098.
Okoye, L. U., Nwakoby, C. I. N. & Okorie, E. U. (2016). Deregulating the Nigerian Economy for Enhanced Real Sector Growth. Journal of Policy and Development Studies, 10(2), 144-158.
Omankhanlen, A. E. (2012). The Financial Sector Reforms and Their Effect on the Nigerian Economy. Economy Transdisciplinarity Cognition, 15(2), 45-57.
Onwumere, J. U. J., Onudugo, V. & Ibe, I. G. (2013). Financial Structure and Economic Growth: Evidence from Nigeria. Global Journal of Management and Business Research Finance, 13(5), 19-25.
Orji, A., Anthony-Orji, O. I. & Mba, P. N. (2015). Financial Liberalization and Output Growt
In-Text Citation: (Adeusi, Dada, & Adeosun, 2018)
To Cite this Article: Adeusi, S. O., Dada, O., & Adeosun, O. A. (2018). Effect Of Financial Sector Deregulation On Economic Growth Of Nigeria. International Journal Of Academic Research In Business And Social Sciences, 8(9), 1119–1132.
Copyright: © 2018 The Author(s)
Published by Human Resource Management Academic Research Society (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode