Financial reforms, interest rate behaviour and economic growth in Nigeria

The paper examines the implications of financial reform and interest rate behaviour on economic growth in Nigeria. The cointegration and error correction model were used on time series data from 1970-2006. The results demonstrate that financial reform and interest rates have significant impact on economic growth in Nigeria. The results imply that the behaviour of interest rate is important for economic growth in view of the empirical nexus between interest rates and investment, and investment and growth. The study recommends that government must embark on growth enhancing financial reform and be sensitive to the behaviour of interest rates for overall economic growth in the country. -- financial reforms ; interest rate behaviour ; economic growth ; error correction model