NEXUS BETWEEN COMMERCIAL BANKS’ LOAN TO MANUFACTURING SECTOR AND ECONOMIC GROWTH IN NIGERIA 1986 – 2018
Maria Abdullahi; **Ladan Amina Shuni & ***Musa Abdullahi Sakanko
*Department of Economics, Sokoto State University, Sokoto State, Nigeria
**Department of Economics, Shehu Shagari College of Education, Sokoto, Nigeria
***Department of Economics, University of Jos, Plateau State, Nigeria.
Email: mariaaabdul@yahoo.com; amina.shuni@hotmail.com; sakanko2015@gmail.com
ABSTRACT
The main aim of this study is to analyze the effect of commercial banks credit to manufacturing sector on economic growth in Nigeria during period 1986 to 2018, employed the ARDL bound testing technique. It
was found that commercial banks credit to manufacturing sector, economic growth, maximum lending rate and money supply have long-run relationship. Likewise, the short-run and long-run results revealed that
commercial banks credit to manufacturing sector within the study period has a positive and statistically significant effect on economic growth in Nigeria. However, money supply and maximum lending rate have inverse and statistically significant effect on economic growth. Thus, the study recommended that, the policymaker should devise strategies that will ease the process and cumbersome commercial banks’ credit to the private sector and also encourage commercial banks to increase their pool of credit to the manufacturing sector in Nigeria to aid more of their contribution to economic growth. It is also recommended that monetary policy committee should review the current monetary policy and the policymakers should also review the commercial bank’s interest charge on money lend to manufacturing sectors in order to ease the doing of business and increase their revenue to enhance their contributions to economic growth and
development. KEYWORDS: ARDL, Commercial banks loan, Economic growth, manufacturing sector JEL CLASSIFICATION: C32, G21, O40, L60
