Financial Inclusion, Economic Growth and Macroeconomic Stability in Nigeria

Abstract

In the face of the present economic realities, the study investigated the impact of financial inclusion on economic growth and macroeconomic stability over the period of 40 years (1980 - 2020), with focus on basic macroeconomic indicators (poverty, output growth, price stability and unemployment). Using secondary data from Central Bank of Nigeria (CBN) Statistical Bulletin (various years) and World Development Indicators (WDI - 2020), the study employed suitable cointegration technique viz: Autoregressive Distributed Lag (ARDL) technique. It was found that first,financial inclusion can reduce poverty in the long-run, if the inclusiveness is robust, progressive and sustained, second, the interaction between financial inclusion and output growth was inverse, and that outcome was found to be associated with some encumbrances within the financial system and the economy, third, financial inclusion can stabilize price level in the longrun if the process of inclusiveness is deepened and sustained, and fourth, unemployment can be greatly reduced vis-à-vis financial inclusion, especially if the inclusiveness is deepened and sustained. It was recommended, amongst other things, that a robust financial system should be developed, so as to deepen financial inclusion (like expanding credit and money supply, amongst other things) in a way that can encourage economic growth and stabilize the economy, ceteris paribus.