EFFECT OF DEPOSIT MONEY BANKS ON THE ECONOMIC GROWTH OF NIGERIA
This study examined the role that Deposit Money Banks (DMBs) had in Nigeria's economic expansion. The study project used data from the Central Bank of Nigeria (CBN) statistical bulletin for the years 1987 to 2014 to accomplish this goal.
Real gross domestic product (RGDP), a proxy for economic development in Nigeria, is identified as the dependent variable in the research work's multiple regression model, while the exchange rate (EXR), interest rate (INTR), and money supply (M2) are identified as the DMBs' activities in Nigeria, a proxy for their impact, and they serve as the study's independent variables.
The single multiple regression model, in which RGDP was the explained variable and interest rates, the money supply, and exchange rates were the explanatory variables, was specified using the ordinary least square (OLS) approach using secondary data.
The results of the data analysis indicate that the independent variables and dependent variable have a favourable and substantial association. The estimated model has explanatory/expandability (predictive) capacity, as indicated by the coefficient of determination R2 (R-Square), which is approximately.89 (89%) in size.
Therefore, DMB's operations and functions are what propel Nigeria's economic development, which leads to the conclusion that DMB has an impact on that development. As a result, the following recommendations were given for policy managers:
In order for the CBN's contractionary monetary policy stance to be sustained, the government should create the proper laws that will lower, if not completely eliminate, Nigerians' high taste for imported goods that can be substituted locally.
Additionally, by diversifying Nigeria's sources of foreign exchange, the CBN should create the proper policy framework to close the gap between the official and parallel market exchange rates.
THE STUDY'S history
1.0 STATEMENT OF THE PROBLEM
Literally, if someone asked to name the biggest issue that will arise throughout a research project, they would undoubtedly name finances. But as I started my effort, I discovered the opposite to be true.
The biggest issue I had, though, was my inability to access the data source. Scepticism and bureaucratic bottleneck are two ways that this is shown.
If it is discovered that the research was conducted by a student, the problem is made worse or is compounded. This is not meant to downplay the importance of financing in research, as all choices must be made in light of available funds.
1.1 OBJECTIVES OF THE STUDY
This study's primary goal is to examine the extent to which Deposit Money Banks (DMBs) contributed to Nigeria's economic development. Another goal is:
To ascertain whether DMBs' actions in Nigeria had an effect on the country's rate of economic growth.
To ascertain whether there is a meaningful relationship between the DMBs' activities and Nigeria's Real Gross Domestic Product (RGDP).
Real Gross Domestic Product (RGDP) is the measure being employed in this study to gauge the pace of economic expansion.
While the money supply, interest rate, and exchange rate are taken into account when estimating the contributions of DMBs to economic growth.
The study's secondary goal is to function as a foundation or source of information for other academics who could be interested in investigating how DMB activities affect economic growth.
1.2 RESEARCH QUESTIONS
To do the research job adequate justice, the following research question was developed.
i. How much of an impact do DMBs' activities in Nigeria have on that country's rate of economic growth?
ii. How big of a connection exists between the DMBs' operations and Nigeria's Real Gross Domestic Product (RGDP)?
The following are the hypotheses that this study aims to test:
H0: The degree of economic growth in Nigeria is unaffected by the DMBs' activity there.
H1: The amount of economic growth in Nigeria is impacted by DMBs' activity there.
H0: There is no meaningful connection between the DMBs' operations and Nigeria's Real Gross Domestic Product (RGDP).
H1: There is a considerable connection between the DMBs' activity and
Nigeria's actual Gross Domestic Product (RGDP).
1.4 SCOPE OF THE STUDY
The activities of Deposit Money Banks (DMBs) in Nigeria as prescribed by the country's central bank are the subject of this study.
The actions of the nation's commercial banks will be highlighted. This is due to the fact that all other DMBs, including merchant banks and micro-finance institutions, interact with the monetary authority through commercial banks.
This study will be restricted to the period between 1987 and 2014 due to the activities of Deposit Money Banks (DMBs) that began before Nigeria gained formal independence.
The only reason for this limitation was statistical analysis. Because the number of variables if this study is extended to the period of independence will be greater than thirty, which is the minimum for ordinary least square (OLS) analysis.
1.5 THE SIGNIFICANCE OF THE STUDY
The following societal groups will find tremendous value in this research work:
Researchers, government officials, and policy makers in the monetary authority will all benefit greatly from this study's findings.
The research can help the government create fiscal policies that will allow it to accelerate national development.
This discovery can also be used by the monetary authorities to modify or create new monetary policies as needed.