COMPLEMENTARY RELATIONSHIP BETWEEN DOMESTIC CREDIT TO THE PUBLIC AND PRIVATE SECTORS IN NIGERIA

Victor Ifeoma OLANNYE; Emmanuel Olukayode MAKU; Oluwaseyi Adedayo ADELOWOKAN; Babatunde Adekunle OKUNEYE

Victor Ifeoma OLANNYE Department of Economics, Olabisi Onabanjo University
Emmanuel Olukayode MAKU Department of Economics, Olabisi Onabanjo University
Oluwaseyi Adedayo ADELOWOKAN Department of Economics, Olabisi Onabanjo University
Babatunde Adekunle OKUNEYE Department of Economics, Olabisi Onabanjo University

Keywords: : Domestic credit, complementary, economic growth, autoregressive distributed lag, economy

Abstract

Domestic credit is of paramount importance for sustainable growth in any economy with credit options contributing to accelerating economic growth. This investigation aims to analyze the complementary affiliation between credit to both the public and private sectors in Nigeria, at the domestic level, from the year 1981 to the year 2020. An Auto-regressive Distributed Lag model was applied to elucidate the correlation between the variables in the short and long-term periods. From the findings, the relationship between credit to the public and private sectors is not complementary. Therefore, it is the recommendation of the study that the adoption of a complementary relationship between public and private sector credits at the domestic level of domestic lending and sector-specific credit policies. Furthermore, in order to ensure proper credit monitoring, effective risk management practices should be intensified, with more emphasis on the public sector, so that domestic credit will have an improved impact on the growth of the economy.