Author:
Onum Friday Okoh

Doi: 10.26480/csmj.01.2025.22.29

This is an open access article distributed under the Creative Commons Attribution License CC BY 4.0, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited

For many years, financial sector development has been a focal point of policy reforms in Nigeria, aimed at stimulating economic growth. This study investigates the relationship between financial sector development and economic growth in Nigeria from 1980 to 2023. Using GDP as the dependent variable, and financial institution depth, financial market depth, exchange rate, and interest rate as independent and control variables, the research employs various econometric techniques, including descriptive statistics, unit root tests, cointegration bound tests, and the Autoregressive Distributed Lag (ARDL) model. The findings suggest that financial development has a significant impact on economic growth, with varying short-run and long-run effects depending on the specific measures of financial development. While financial market depth demonstrates a negative relationship with growth in the short run, financial institution depth shows a positive influence. The study underscores the importance of enhancing financial sector infrastructure to foster sustainable economic growth and concludes with policy recommendations and suggestions for further research on financial sector dynamics in developing economies.