AN EVALUATION OF THE IMPACT OF BANKING SECTOR REFORMS ON ECONOMIC GROWTH IN NIGERIA (1986 – 2009)

AN EVALUATION OF THE IMPACT OF BANKING SECTOR REFORMS ON ECONOMIC GROWTH IN NIGERIA (1986 – 2009)

Abstract:

This thesis work examines the effects of banking sector reforms on economic growth in Nigeria from 1986 – 2009. The choice of this period is to enable us focus strictly on the era of liberalization and consolidation of the banking sector. The study employed ordinary least squares (OLS) to estimate a set of disaggregated growth equations in order to properly locate the impact of the banking sector reforms on economic growth, for the four sectors of the economy and GDP. The model is disaggregated into five – equation regression models. The result of the study revealed a positive relationship between banking sector reforms and economic growth. Specifically the findings showed that banking consolidation reform (2004) impacts more positively on economic growth than the banking liberalization (1986) reform. Based on the findings of the study and in recognisition of the key role the banking sector plays in economic growth, the study recommends that, for government to stimulate growth, there should be proper channeling of resources to the real sectors. Government should also ensure strict regulatory measures to regulate the banking sector to improve private sector performance in Nigeria.

AN EVALUATION OF THE IMPACT OF BANKING SECTOR REFORMS ON ECONOMIC GROWTH IN NIGERIA (1986 – 2009)