Anthony Olugbenga Adaramola

Ekiti State University, Ado-Ekiti, Ekiti State Nigeria

Adebayo Olagunju

Osun State University, Oshogbo, Nigeria

Ayodele Damilola Ogunlokun*

Osun State University, Oshogbo, Nigeria

DOI: 

ABSTRACT 

The study tested the relevance of Demand-following hypothesis in the Nigerian financial sector using time series data were obtained over a period of 36 years from 1986 to 2021. The study modelled credit provision in the financial sector as a linear function of the three components of the real sector of the economy with interest rate as a control variable. Data were collected from the apex Bank’s Statistical Bulletin and analyzed by Autoregressive Distributed Lags after cointegrated relation was detected among the variables. Finding from the study unfolded evidence of weak and positive effect relationship between industrial sector, services sector and credit provision by the financial sector; on the other hand, a negligible negative effect was documented between the agricultural output and the provision of credit by the financial sector. Although evidence of weak causation was discovered between the growth of real sector and the financial sector; however, the causality test result showed further that it is the financial sector caused growth of the real and not vice versa as stated in the Demand- following hypothesis. Based on this finding, the study concluded that relationship between the real sector’s growth and the financial sector’s growth is more of effect than causal while the Demand-following hypothesis does not hold true in the context of the Nigerian financial sector. Consequently, the study recommended of the action-based state of emergency in the real sector so as to rapidly address some of the infrastructural challenges impeding the growth of the sector from observing Demand-following hypothesis.

Keywords: Causality; Credit; Finance; Growth; Real Sector

ABSTRAK

Studi ini menguji relevansi Hipotesis Permintaan dalam sektor keuangan Nigeria menggunakan data deret waktu yang diperoleh selama periode 36 tahun dari 1986 hingga 2021. Studi ini memodelkan penyediaan kredit di sektor keuangan sebagai fungsi linier dari tiga komponen sektor riil ekonomi dengan suku bunga sebagai variabel pengendali. Data dikumpulkan dari Buletin Statistik Bank Sentral dan dianalisis menggunakan model Autoregressive Distributed Lags (ARDL) setelah terdeteksinya hubungan kointegrasi di antara variabel-variabel tersebut. Temuan studi menunjukkan adanya hubungan efek lemah dan positif antara sektor industri, sektor jasa, dan penyediaan kredit oleh sektor keuangan; di sisi lain, terdapat efek negatif yang dapat diabaikan antara output pertanian dan penyediaan kredit oleh sektor keuangan. Meskipun terdapat bukti hubungan kausalitas yang lemah antara pertumbuhan sektor riil dan sektor keuangan; namun, hasil uji kausalitas menunjukkan bahwa sektor keuangan lah yang menyebabkan pertumbuhan sektor riil, bukan sebaliknya seperti yang dinyatakan dalam Hipotesis Demand-following. Berdasarkan temuan ini, studi menyimpulkan bahwa hubungan antara pertumbuhan sektor riil dan pertumbuhan sektor keuangan lebih bersifat efek daripada kausal, sementara Hipotesis Demand-following tidak berlaku dalam konteks sektor keuangan Nigeria. Akibatnya, studi merekomendasikan penerapan keadaan darurat berbasis tindakan di sektor riil guna mengatasi secara cepat beberapa tantangan infrastruktur yang menghambat pertumbuhan sektor tersebut dalam mengamati Hipotesis Demand-following.

Keywords: Kausalitas; Kredit; Keuangan; Pertumbuhan; Sektor Riil

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