The Role of Financial Inclusion and Industrialization on Economic Growth: Evidence from Nigeria

The interdependence between financial inclusion (FINC), industrialization (IND), and economic growth (EG) creates access to financial services that can boost IND and EG, promoting entrepreneurship and job creation. In particular, IND may be the driving force behind EG in order to increase economic productivity and job creation. At this point, EG can pave the way for IND and FINC by generating positive feedback for economic development. Recent studies provide snapshots of FINC and EG in Nigeria but have failed to highlight the need to investigate the nexus between FINC, IND, and EG. Here the study presents the nexus between FINC, IND, and EG in Nigeria using annual time series data from the 2022 World Bank Development Indication spanning from the period of 1980 to 2020 and analyzed using the pre-estimation and post-estimation techniques with the use of version 9 of the Eviews statistical package. Gross domestic product (GDP) were used as proxy for EG, percentage share of manufacturing value added to GDP as a proxy for IND, and the percentage share of domestic credit to the private sector by banks to GDP as a proxy for FINC. The result shows a cointegration between EG, IND, and FINC in Nigeria, with a significant relationship between IND and EG in Nigeria, while FINC and EG are not significant. The study recommended that broadening entrepreneurship and FINC, building infrastructure, supporting industry, encouraging foreign investment, enhancing technology use, and strengthening the regulatory environment are key to fostering EG in Nigeria