ABSTRACT

The study analyzed the impact of financial liberalization on the economic growth of Nigeria (1980 – 2016). The index of financial liberation was credit to private sector, exchange rate and interest rate. The specific objectives were to: determine the impact of credit to private sector on economic growth of Nigeria; determine the impact of exchange rate on economic growth of Nigeria and to determine the impact of interest rate on economic growth of Nigeria. Data used for the study were analyzed with trend and multiple regression analysis using the Ordinary Least Squares (OLS) method. The result shows that credit to private sector has positive and significant impact on gross domestic product of Nigeria while exchange rate has significant but negative impact on gross domestic product. On the contrary, interest rate has positive but insignificant impact on gross domestic product of Nigeria. It is recommended that the monetary authorities and policy makers in Nigeria need to support the liberalization process by formulating complementary policies and financial sector reform measures that will help in strengthening the impact of the liberalization process on the economy; formulate and implement monetary policies that leads to decrease in exchange rate and also ensure that the benefits of the liberalization exercise is maximized.