Exploring The Relationship Between Sectoral Credit Allocation And Nigeria’S Economic Growth
Adeyemi, Oluwaseun Michael
Department of Economics, Obafemi Awolowo University, Ile-Ife, Nigeria
Abstract
The banking sector remains central to economic transformation through its financial intermediation function, which mobilizes surplus funds and reallocates them to deficit sectors for productive investment. In Nigeria, deposit money banks have consistently played this crucial role by channeling credit to key real sectors such as agriculture, industry, construction, and services. The efficiency of this intermediation process is vital for capital formation, investment diversification, job creation, and ultimately, sustainable economic growth. Anchored on the endogenous growth theory, this study investigates the nexus between sectoral bank credits and economic growth in Nigeria. By examining how sector-specific credit allocation influences macroeconomic performance, the paper highlights the implications of credit flows for fostering stability, stimulating foreign and domestic investment, improving standards of living, and reducing poverty. The study underscores the strategic importance of strengthening the banking sector’s intermediation capacity to drive inclusive and sustainable growth in Nigeria