Financial Reforms, Inclusive Growth and Economic Prosperity in Nigeria

This study delves into the transformative effects of financial reform on fostering inclusive growth and bolstering economic prosperity in Nigeria covering 2007Q1 to 2022Q4. Data were obtained from World Development indicators. Bank Asset Capitalization, Lending Rate, Banks Non-performing Loans, Commercial Bank
Branches, Deposit with Commercial Banks and Borrowers from Commercial Banks were utilised to proxy financial reform while Poverty and Gross Domestic Product captured both Inclusive Growth and Economic Prosperity. Augmented Dickey Fuller unit root test and Auto-regressive Distributive Lag Model were utilised to ensure stationary status and analyse the variables. The study found that Bank Asset Capitalization and Lending Rate had favourable and substantial impact on poverty but insubstantially related with gross domestic product. However, Banks Non-performing Loans and Deposit with Commercial Bank reported an unfavourable but substantial impact on poverty and gross domestic product. Also, Commercial Bank Branches unfavourably related with poverty but insubstantial with gross domestic product. Finally, borrowers from commercial banks had a favourable and substantial effect on poverty but insubstantial with gross domestic product. Hence, it was concluded that financial reform substantially contributes to both inclusive growth and economic prosperity in Nigeria. It was recommended amongst others that Central bank of Nigeria (CBN) should enhance financial inclusion initiatives and monitor lending practices to prioritize sectors crucial for poverty reduction such as agriculture and SMEs.