EVALUATION OF THE INTERMEDIATION ROLE OF THE DEPOSIT MONEY BANKS ON THE REAL SECTORS OF THE NIGERIAN ECONOMY (1999 – 2008)
ABSTRACT
This paper assesses the impact of intermediation roles of banks on the performance of the real sectors of the Nigerian economy. The main objective is to find out if the banking industry loans and advances have any significant effect on the real sectors GDP growth rate. The research design adopted in this dissertation was ex-post facto, that is, the use of secondary data. The researcher simply analyzed reported documentations of the study variables extracted from Central Bank of Nigeria (CBN) and Nigerian Deposit Insurance Company (NDIC). The population of the study was 25 deposit money banks operating in Nigeria after the recent consolidation tharot took place in the banking industry. The sample of the study was made up of the same 25 deposit money banks as the number is small hence manageable. By judgmental sampling real sectors of the Nigerian economy is represented by agriculture, manufacturing and mining. The data for this work were collected by the use of documentary data collection method from the published annual reports of Central Bank of Nigeria and Nigerian Deposit Insurance Company. The data collected were subjected to statistical analysis using the SPSS version. Parametric statistics in forms of mean and standard deviation, ANOVA, the student t-test, co-efficient of correlation and simple linear regression were used to analyze research questions and hypotheses. The study found that there is no significant effect of banking industry’s credits on the GDP growth of agriculture and mining sectors but it significantly impacts positively on the manufacturing component of GDP. The study recommends among other things that CBN should continue to collaborate with all stakeholders in repositioning the banking industry to maximally contribute its quota to the country’s real GDP growth rate. Again, there is need for close monitoring of the credit facilities extended to these sectors especially the agricultural sector as some of these facilities are diverted to other personal uses rather than for the purpose they are meant for.