The Sectoral Distribution of Commercial Banks' Credit and Economic Growth in Nigeria

The study examined the sectoral distribution of commercial banks' credit and economic growth in Nigeria. The specific objectives include to: Examine the effect of commercial bank’s loans and advances to agricultural sector on economic growth in Nigeria. Ascertain the effect of commercial bank’s loans and advances to mining and quarrying sector on economic growth in Nigeria. The study adopted pre-test estimation of descriptive statistics, unit root and bound tests to ensure that the data set is stationary and fit for the analysis. Auto-Regressive Distributed Lag Model (ARDL) method of analysis was adopted for the estimation. The data utilized for the analysis were extracted from CBN statistical bulletin. The study revealed that commercial bank’s loans and advances to agricultural sector for the period of this study has positive and insignificant impact on gross domestic product in Nigeria, commercial bank’s loans and advances to mining and quarrying sector for the period of this study has positive and insignificant impact on gross domestic product in Nigeria. Hence, sectoral distribution of commercial bank’s loans, advances have not contributed significantly to the Nigerian economic growth. Thus, the study concluded that sectoral distribution of commercial bank’s credit had positive and insignificant impact on economic growth of Nigeria. The study recommends that monetary authorities should deregulate interest rate to make funds available for agricultural sector and mining and quarrying sector to expand their business, increase productivity and boast the economy at the end. Government should devise measures to closely monitor the utilization of credits given to every sector of the Nigerian economy in order to enthrone accountability and ensure that the projects for which the credits were obtained are carried out.