FINANCIAL SECTOR LIBERALIZATION AND ECONOMIC GROWTH IN NIGERIA: AN EMPIRICAL STUDY

This study focused on financial sector liberalization and economic growth in Nigeria. The ordinary least square multiple regression analytical method was used to examine the relationship between financial sector liberalization and economic growth. Some statistical tools were employed to explore the relationship between these variables. The analysis started with the test of stationarity and co-integration of Nigeria’s time series data. Thereafter an error correction mechanism was used to determine the long-run relationship among the variables examined. The empirical study found that the data were stationary and co integrated and showed that there is a long run significant relationship between financial sector liberalization and economic growth in Nigeria. The multiple regression results showed a significant and negative relationship between financial sector liberalization and economic growth in Nigeria. These results were robust to a number of econometric specifications. The econometric results and conclusion support the need for the government to develop the financial sector towards greater effectiveness and efficiency. In complement of the above, there is the need to revisit the structural adjustment programme with a view to enhancing efficiency by altering the structure.