DOI: 10.36347/sjebm.2018.v05i11.007

Pages: 1038-1048

Reforms in a country’s financial sector are aimed at building a strong and vibrant economic and financial system. This study examines the impact of pre and post banking reforms on the economy of Nigeria using the ordinary least squares. Unit root test, co-integration, the test of difference, and error correction model were employed to determine the spuriousness or authenticity of the data and to determine the long run relationship between the dependent and explanatory variables, among others. Secondary data were sourced from the Central Bank of Nigeria Statistical Bulletin from the period of 1991–2016. The growth rate of Gross Domestic Product is used as a proxy for economic growth. Bank capital base, credit to the private sector, cash reserve ratio, return on equity, and network expansion exercise are proxies for banking sector reform indices. The finding shows that so far, the reforms are yet to make any meaningful contribution to the economic growth of the country, though the study suggests that the reforms may be positively impactful on the economy in the long run. The study recommends that network expansion by banks which engenders financial inclusion should be encouraged. There is also the need to encourage the channelization of more credit to the private by banks by guaranteeing an atmosphere of peace and security among other constraints to enable the private sector to thrive.