ABSTRACT

This study focused on the effect of financial sector reform on the performance of Nigerian economy. The basic issues that have been of crucial interest to academic and policy makers is whether the various reforms in the financial sector have sufficiently led to the deepening and development of the financial markets so as to promote economic growth. In the light of the above, the objectives of the study were to establish the extent to which financial sector reforms in Nigeria have affected savings and investment culture in Nigeria, to establish the extent to which financial sector reforms in Nigeria have affected economic growth in Nigeria and to determine the magnitude to which financial sector reforms have influenced the flow of foreign investment in Nigeria. An ex post facto research design was adopted in this study. Secondary sources of data were used in the study. The data were obtained from the statistical bulletin of the Central Bank of Nigeria. The study covered a period of 28years (1993-2020). Credit to private sector, ratio of money supply to GDP, ratio of market capitalization to GDP, ratio of reserve money to deposits and real interest rates served as the independent variables while gross domestic product, total value of savings in Nigeria and foreign direct investment served as the dependent variables. The ordinary least squares regression method was employed to test the three hypotheses with the aid of the SPSS 22.0 statistical software and results of findings showed that financial sector reforms in Nigeria has positive and significant impact on savings culture in Nigeria; financial sector reforms in Nigeria have not improved economic growth in Nigeria for the period under study and financial sector reforms in Nigeria have improved economic growth in Nigeria. Among the recommendations is that given the level of saving and investment in Nigeria, complementary reforms are needed to mobilize contractual savings, promote markets for commercial papers, mortgages and other long-term financial instruments.