IMPACT OF FINANCIAL DEVELOPMENT ON INEQUALITY IN NIGERIA (1981-2017).

IMPACT OF FINANCIAL
DEVELOPMENT ON INEQUALITY IN
NIGERIA (1981-2017).
Onah Keziah Ugochi
Department of Banking and Finance
University of Nigeria, Enugu Campus
(UNEC)
ABSTRACT
This study examined the impact of financial
development on inequality in Nigeria using
annualized time series data from the Central
Bank of Nigeria Statistical bulletin and World
Development indicators spanning 1981-2017.
The specific objectives were to(i) Determine
the responsiveness of inequality to financial
market development in Nigeria (ii)Investigate
the impact of financial development on
inequality in Nigeria(iii) Appraise the impact of
financial market development on poverty level
in Nigeria. (vi) Measure the responsiveness of
poverty level on financial institution
development in Nigeria. The study employed
the Autoregressive Distribution Lag Model,
and Ganger causality was adopted to test for
co-integrating and causal relationships. The
results indicate a positive and significant co-
integrating relationship between financial
development and inequality. The Error
correction
representation
shows
that
inequality adjusts to financial development by
17% equilibrium due to short-run deviation.
The test for causality revealed both a uni and
bidirectional causality between financial
development
and
inequality.
It
is
recommended that the government should
target more of its policies which would arrest
inequality, and ultimately boost economic
growth and development in the economy. The
study believes that the financial developmentBook of Abstract
had been skewed towards an “unequal
society” where the rich have grown richer and
the poorer had grown poorer in Nigeria.
Keywords: Inequality, financial development
in Nigeria and ARDL.

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