Financial Liberalization and Domestic Savings in Nigeria: An Empirical Analysis (Published)
One of the reasons for financial liberalization is to adequately mobilize domestic savings in developing countries. Hence, this study investigated the existing relationship between financial liberalization and domestic savings in Nigeria. In achieving this, contemporary econometric approach involving unit root test, co-integration test and error correction model was adopted to analyze the time series data from 1970 to 2015. The study used interest rate spread and financial liberalization index as measures of financial liberalization. It used credit to the private sector over GDP and the number of bank branches over the population to measure financial deepening and financial inclusion respectively. The findings revealed that per capita income and financial deepening were the two factors that affected domestic savings in Nigeria significantly as against interest rate which was widely viewed as the major factor affecting savings mobilization in Less Developed Countries. The study recommended increase in the existing level of per capita income which could be achieved by upward review of wages and salaries of workers every three years. Monetary authorities should use moral suasion to encourage microfinance banks and commercial banks to establish branches in rural areas to help further reduce the population of unbanked Nigerians and ensure greater financial deepening. Monetary authority should ensure that interest rate is determined by market forces to reflect the true depth of the Nigerian financial system and thereby reduce the interest rate spread. The sustenance of CBN autonomy was equally recommended as a key to ensuring financial system stability
Keywords: Domestic Savings, Financial Inclusion, Financial Liberalization, Financial deepening, Nigeria
An Analysis of the Impact of Financial Sector Reforms on Economic Growth in Cameroon (Published)
The ultimate task of this study is to examine the nature and extent of the influence which financial sector development, resulting from the financial sector reforms implemented in Cameroon has on the economic growth of the country from 1980 to 2015. The evaluation covers the roles of three key financial sector indicators (the ratio of broad money supply to GDP, the banking assets ratio, and the interest rate spread) each of which reflects a different facet of financial sector development. To achieve the best needed results we tested and adjusted the data to obtain stationarity. Thereafter we proceeded to determining the quantitative relationships between the dependent and the independent variables with the use of the Vector Autoregression (VAR) technique. Parameter estimates were empirically tested. We found out that all the financial sector development variables tested were economically and statistically relevant in at least one of the four VAR equations generated while in two of the four VAR equations the values of the adjusted R2 indicate that more than 70% of variations in the current real GDP in Cameroon is accounted for by the lagged financial sector development indicators included in the models. Based on the above results we conclude that: there exist a strong positive long run relationship between financial sector development and economic growth in Cameroon. This result confirms that creating the conditions for a deep and efficient financial system can contribute robustly to sustained economic growth in Cameroon. Based on the findings, it is suggested that. Based on the findings of this study, we recommend continuous efforts to enhance financial intermediation, deepen the Douala stock exchange market and fully liberalize interest rates in the country.
Keywords: Financial Liberalisation, Financial Repression, Financial System, Financial deepening