Banking Sector Reform Policy and Growth of Manufacturing Sector (An Econometric Analysis of Nigerian Economy)

Abstract

The paper empirically examined the impact of financial sector reforms on Banks financial services to the manufacturing sector of Nigeria. It also explains the perceived relationship between reform in the banking sector, and the volume of loans and advances extended to the sector.  This is to ascertain the relative impact in the increased output of this sector using various econometric estimations, like the ordinary least square (OLS) technique; Augmented Dickey Fuller (ADF) unit root test; Johansen co-integration test, and Error Correction Mechanism (ECM). The result showed that although the reform of the banking sector have had positive impact on the manufacturing sector in terms of credits, yet such credit did not have significant increase in the economic activities of the country. The paper however recommended that,  Government policies is to be focused more on income, saving, interest rate variables; and that, the imperatives of broad money supply be increased through the appropriate monetary policy instruments, to enhance personal income.

Keywords: Financial Sector, Economic Growth, Loans Mobilization, Reforms.