Financial deepening and global integration as drivers of economic growth in Nigeria: An empirical analysis

Abstract

This study gathered secondary data from the Central Bank of Nigeria's (CBN) Statistical Bulletin and the World Development Indicators (WDI) to investigate the association among financial deepening, global integration, and Nigerian economic growth between 1990 and 2024. An Autoregressive Distributed Lag (ARDL) approach was employed based on the outcome of the unit root test and a bounds test. The results revealed that both financial deepening and global integration significantly influence Nigerian economic growth, with broad money supply and private sector credit showing negative and positive effects, respectively, while trade openness exhibits a direct link with economic growth. In addition, the lending rate hinders economic growth. This study concludes that financial deepening and global integration have a significant impact on Nigeria's economic growth. It is recommended that policymakers enhance credit access, promote trade openness, and ensure stable, growth-friendly interest rates. The study contributes to existing literature by exploring several dimensions of financial deepening and global integration as they influence economic development, while incorporating corruption and macro-economic yardsticks as a moderating variable influencing financial sector development.