Analysis of Bank Sectoral Lending and Its Influence on Economic Growth in Nigeria
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This paper examines the relationship between bank sectoral lending and economic growth in Nigeria over the period 2009 to 2018 using annual time series data gathered from the Nigerian Bureau of Statistics and the Central Bank of Nigeria (CBN) annual report for the period of 2009 to 2018. The stationarity of the data was tested using the Augmented Dickey Fuller Test (ADF) and it indicates that the all the variables of the study were all stationary at levels and are integrated of order [I (0)]. This implies that the relationship between the variables of the study can be estimated using the ordinary least square regression analysis (OLS). The probability value of the estimate was used to test the hypotheses of the study. The summary statistics shows that the probability value of the Jarque-Bera test statistics is greater than the critical value, implying that the data for the study is normally distributed. The finding from the study indicates that sectoral allocation to Manufacturing Sector (MAN) has a positive effect on Gross Domestic Product and the relationship is statistically. This implies that a unit increase in sectoral allocation will lead to an increase in GDP by a margin of 90.01%. Sectoral lending to Agriculture (AGR) was found to have positive but not statistically significant (p>0.05) effect on Gross Domestic Product. It was concluded that bank lending has a tremendous positive effect on economic growth. It was recommended among others that It is recommended that sectoral allocation to the agricultural subsector be increased and the disbursement of the loan be monitored so that it can reach the intended beneficiaries. Also, the disbursed loan should be monitored so that it is utilized or the purpose for which it was meant for. Since sectoral allocation to the manufacturing sector is significant and positive, government should ensure the proper financing and monitoring of this sector.
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