Financial Development, Financial Openness and Economic Growth in Nigeria

  • Christian E. Bassey Lecturer, Department of Economics, University of Calabar, NIGERIA
  • Okoiarikpo Benjamin Okoi Lecturer, Department of Economics, University of Calabar, NIGERIA
  • Ikpe Kingsley Imoh Lecturer, Department of Economics, Akwa Ibom State University, NIGERIA
Keywords: Financial Development, Financial Openness, Economic Growth and Auto-Regressive Distributed Lag Model


This study examined the impact of financial development and financial openness on economic growth in Nigeria between 1981 and 2019. This was done through the use of the Auto-Regressive Distributed Lag (ARDL) model. In doing this, the ratio of credit to the private sector to the GDP and broad money to narrow money were used as measures of financial development and financial openness respectively. The study found that financial development has a positive and insignificant impact on economic growth in Nigeria in the long and short-run. The study also found that financial openness has a negative and insignificant impact on economic growth in Nigeria in the long-run. The results of the study further revealed that simultaneous existence of financial development and financial openness has an insignificant but positive impact on economic growth in Nigeria in the long-run. Based on the findings, the study recommended that the CBN should increase its efforts towards the regulation and supervision of the financial sector to reduce the incidence of financial distress. The study also recommended that efforts to develop the mortgage and insurance sector and the capital market should be intensified through regulatory improvements, improvements in the instruments in use in the market as well as public enlightenment programs to increase awareness of the potentials of the mortgage, insurance and capital markets. The final recommendation made by the study is that more restrictions should be placed on the inflow of capital in and out of the country to guard against sudden capital flow reversals.


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How to Cite
Christian E. Bassey, Okoiarikpo Benjamin Okoi, & Ikpe Kingsley Imoh. (2021). Financial Development, Financial Openness and Economic Growth in Nigeria. International Journal of Engineering and Management Research, 11(3), 241-252.