This study examined the nexus of sectoral allocation of bank credits and economic performance in Nigeria from 1987 to 2016 by a differenced model analysis. The study employed secondary data sourced from the Central Bank of Nigeria (CBN) Statistical Bulletin. The ordinary least squares (OLS) method of regression analysis was adopted at both level series and first difference models to ensure stationarity of data and eliminate serial correlation which was tested using the Breush-Godfrey serial correlation LM test in order to ensure that the results obtained were not spurious. The results revealed: (i) positive and significant relationship between bank credits to the agricultural sub-sector and economic performance; (ii) positive but insignificant relationship between bank credits to the real estate and construction sub-sector and economic performance; (iii) positive but insignificant relationship between bank credits to the mining sub-sector and economic performance; (iv) negative but insignificant relationship between bank credits to the manufacturing subsector and economic performance; and (v) bank credits to the overall production sector (comprising the agricultural, real estate and construction, mining, and manufacturing sub-sectors) of the economy did not significantly contribute to economic performance. The study, therefore, recommended that more attention should be given to the agriculture sub-sector in terms of the amount of loans granted; as well as the assistance given to the subsector to encourage more participation and greater output so that it will continue to contribute more to economic growth in Nigeria.
This work by European American Journals is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License