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Real Sector Output and Financial Liberalisation in Nigeria

Author

Listed:
  • Anthony Orji
  • Ekene Aguegboh
  • Onyinye I. Anthony-Orji

Abstract

This study investigates the impact of financial liberalisation on real sector output in Nigeria by adopting the Ordinary Least Square (OLS) modeling technique for the econometric analysis. Pre-estimation tests such as the Stationarity and Cointegration tests were also done. The results show that the variables of interest in the model are cointegrated and that financial liberalisation (proxied by private sector credit) has a negative impact on manufacturing sector, while it has a positive impact on agricultural sector. This implies that credit to private sector was diverted to some unproductive ventures, rather than productive activities. Furthermore, poor infrastructure, high level of corruption, political and economic instability and high cost fund were found to have constrained the contribution of private sector credit to economic development. On the other hand, its positive impact on agriculture shows that there is an improvement in the agricultural sector since the commencement of financial liberalisation. The study concludes that efforts should be geared towards militating against the socioeconomic cum institutional factors that constrained the contribution of private sector credit to manufacturing output growth in Nigeria within the period under review.

Suggested Citation

  • Anthony Orji & Ekene Aguegboh & Onyinye I. Anthony-Orji, 2015. "Real Sector Output and Financial Liberalisation in Nigeria," Journal of Infrastructure Development, India Development Foundation, vol. 7(2), pages 136-150, December.
  • Handle: RePEc:sae:jouinf:v:7:y:2015:i:2:p:136-150
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    Citations

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    Cited by:

    1. Asongu, Simplice A. & Odhiambo, Nicholas M., 2021. "Inequality, finance and renewable energy consumption in Sub-Saharan Africa," Renewable Energy, Elsevier, vol. 165(P1), pages 678-688.
    2. Tchamyou, Vanessa S. & Erreygers, Guido & Cassimon, Danny, 2019. "Inequality, ICT and financial access in Africa," Technological Forecasting and Social Change, Elsevier, vol. 139(C), pages 169-184.
    3. Simplice A. Asongu, 2019. "Financial Access and Productivity Dynamics in Sub-Saharan Africa," Working Papers 19/052, European Xtramile Centre of African Studies (EXCAS).
    4. Asongu, Simplice A. & Nnanna, Joseph & Acha-Anyi, Paul N., 2020. "Finance, inequality and inclusive education in Sub-Saharan Africa," Economic Analysis and Policy, Elsevier, vol. 67(C), pages 162-177.
    5. Vanessa S. Tchamyou, 2019. "The Role of Information Sharing in Modulating the Effect of Financial Access on Inequality," Journal of African Business, Taylor & Francis Journals, vol. 20(3), pages 317-338, July.
    6. Simplice A. Asongu & Rexon T. Nting, 2021. "The role of finance in inclusive human development in Africa revisited," Research Africa Network Working Papers 21/006, Research Africa Network (RAN).
    7. Asongu, Simplice A. & Nnanna, Joseph & Acha-Anyi, Paul N., 2020. "Inequality and gender economic inclusion: The moderating role of financial access in Sub-Saharan Africa," Economic Analysis and Policy, Elsevier, vol. 65(C), pages 173-185.
    8. Oyakhilome Ibhagui, 2020. "Financial Reforms, Capital Investment and Financial Intermediation in China," South Asian Journal of Macroeconomics and Public Finance, , vol. 9(1), pages 58-86, June.
    9. Simplice A. Asongu & Joseph Nnanna & Paul N. Acha-Anyi, 2020. "Inclusive Education for Inclusive Economic Participation: the Financial Access Channel," Research Africa Network Working Papers 20/019, Research Africa Network (RAN).
    10. Ngozi Adeleye & Evans Osabuohien & Ebenezer Bowale & Oluwatoyin Matthew & Emmanuel Oduntan, 2018. "Financial reforms and credit growth in Nigeria: empirical insights from ARDL and ECM techniques," International Review of Applied Economics, Taylor & Francis Journals, vol. 32(6), pages 807-820, November.

    More about this item

    Keywords

    Financial liberalisation; real sector; agricultural sector; manufacturing sector; Nigeria;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • N17 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Africa; Oceania

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