DEPOSIT MONEY BANKS AND ECONOMIC GROWTH IN NIGERIA

ABSTRACT

This study investigates the relationship between deposit money banks and economic growth in Nigeria for the period 1981 to 2019. The rationale for the study was based on the realization that rapid economic growth, among others, depends on the robust activities of the banking sector of the economy. Thus, the ordinary least squared econometric technique (OLS) was employed in the analysis of the data; and the empirical findings showed that bank asset (BASS) has significant negative relationship with economic growth in Nigeria; bank deposits (BDEP) has a significant positive impact on economic in Nigeria; bank loans (BLOANS) and while bank investment (BINV) do not have significant relationship with economic growth in Nigeria, as they both failed the 5 percent significance level. The study conclude that deposit money banks are major determinants of the growth of the Nigerian economy. The study recommends that in order to ensure consistent and rapid economic growth in Nigeria, policy makers should endeavour to place priority on efficient management of all deposit money banks’ assets in the country as revealed in the empirical findings.