Impact of Banking Sector Reforms on the Performance of Nigerian Economy

Abstract

This paper examines the impact of banking sector reforms on the performance of Nigerian Economy using structural value. Real growth rate of GDP is used as a proxy for the performance of Nigerian economy while Ratio of Broad Money to GDP, real interest rate, ratio of reserve money to deposit, investment GDP ratio and saving GDP ration are used to capture banking sector reforms. Results from impulse response function and variance decomposition show among other things that the banking sector reforms have not really improve the performance of Nigerian Economy. Also, the empirical results further revealed that the real growth rate of GDP has not significantly alters the banking sector reforms indicators. The policy implications of our study are discussed among which are that monetary authority should be more committed to policy implementation, also, appropriate policies that will increase credit to the private sector and enhance lending behaviour of commercial banks are required.