Impact of Credit Facilities to Private Sector Businesses on Nigeria’s Real Gross Domestic Product (RGDP), 1980 – 2021

Abstract

The research looked at how provision of credit facilities to private sector businesses did (or didn’t) affect the rate of economic expansion in Nigeria between the years 1980 and 2021. We used log-linear multiple regression to investigate both the short-term and the long-term dynamics of the connection between credit facilities to private businesses and overall economic expansion. The empirical findings demonstrated that provision of financial resources to private sector businesses had a considerable and favourable impact on economic expansion in Nigeria between the years 1980 and 2021. The findings also demonstrated that Nigeria's economic climate is adversely affected by the country's exchange rate and interest rate. In the short run, government spending in Nigeria has a big and beneficial impact on real gross domestic product (RGDP), but in the longer run, it has a detrimental impact on the economy. As a result, the report suggests that the government should make it a priority to ensure that private businesses have simple access to credit facilities. It is imperative that the public sector and the private sector work together to develop a fruitful partnership, with the public sector acting as a facilitator and the private sector committing to adhering to the rules and providing goods and services that are of high quality at prices that are competitive. In addition, the study suggested that Nigeria government should focus its policymaking efforts on achieving an optimal exchange rate, interest rate, and level of government expenditure to the private sector. This is so that these factors will have a stronger effect on the level of productivity in the private sector, thereby fostering faster economic growth.