Effect Of Banking Sector Reforms On Nigerian Economy

Abstract

This paper investigates the effects of banking sector reforms on economic growth of Nigeria over the period 1986-2010. The study adopts multiple regression analysis of ordinary least square (OLS) and descriptive analysis in establishing the relationship between gross domestic products that proxy economic growth and interest rate, exchange rate, cash reserve ratio, total asset and loan and advances. The study shows that total asset, cash reserve ratio and interest rate has a significant impact on gross domestic product while exchange rate and loans and advances has no significant impact  on gross domestic product. Based on these findings, it is recommended that government should stimulate total asset, cash reserve ratio and interest rate and in order to maintain significant impact on the economy. While loans and advances should be checkmated in such a way that loans issued out should be to the productive sectors of the economy so as to have significant impact on the economy. Also, exchange rate should be seriously looked into in-line with the economic growth policy. Government should ensure proper implementation and enforce strict compliance with banking reforms and exchange rate policies.