Economic analysis of growth finance and liquid liabilities in Nigeria

  • Received April 13, 2020;
    Accepted September 15, 2020;
    Published October 8, 2020
  • Author(s)
  • DOI
    http://dx.doi.org/10.21511/imfi.17(3).2020.29
  • Article Info
    Volume 17 2020, Issue #3, pp. 387-396
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Liquid liabilities are required to develop key sectors that drive the Nigerian economy by ensuring that loans are available for investment purposes. However, controversies concerning the effectiveness of growth finance in fostering liquid liabilities in Nigeria exist. Thus, this study examines the relationship between growth finance and liquid liabilities in Nigeria, with insight into Nigeria’s real sector. In achieving its objective, the study utilizes secondary data from the annual reports of the Central Bank of Nigeria (1980–2018). The study finds that gross domestic savings significantly drive liquid liabilities in the long run compared to other growth finance indicators, which include stock market development and remittance inflows. Therefore, the study recommends that to improve liquid liability, gross domestic savings, among other growth finance indicators, should be harnessed as a tool to efficiently influence liquid liabilities in the Nigerian economy. The study concludes that attention should be paid to development policies that drive all stakeholders’ gross domestic savings.

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    • Table 1. Description of variables
    • Table 2. Stationarity test
    • Table 3. ARDL bounds test for liquid liabilities and growth finance indicators
    • Table 4. ARDL model for liquid liabilities and finance for growth indicators
    • Table 5. Error Correction Model (ECM) for liquid liabilities and growth finance indicators
    • Table 6. Long-run model for liquid liabilities and finance for growth indicators
    • Conceptualization
      Bello Hassan, Folorunso Ayadi
    • Data curation
      Bello Hassan
    • Formal Analysis
      Bello Hassan, Jeremiah Ejemeyovwi
    • Methodology
      Bello Hassan, Jeremiah Ejemeyovwi
    • Software
      Bello Hassan, Jeremiah Ejemeyovwi
    • Writing – original draft
      Bello Hassan
    • Investigation
      Evans Osabuohien, Jeremiah Ejemeyovwi, Victoria Okafor
    • Project administration
      Evans Osabuohien
    • Resources
      Evans Osabuohien, Folorunso Ayadi, Victoria Okafor
    • Supervision
      Evans Osabuohien, Folorunso Ayadi
    • Writing – review & editing
      Evans Osabuohien, Victoria Okafor
    • Validation
      Folorunso Ayadi, Victoria Okafor
    • Visualization
      Jeremiah Ejemeyovwi