Effect of Trade Services and Interbank Placement on Financial Sector Development in Nigeria

Jimoh Abdulkabir Taiwo
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Jimoh Abdulkabir Taiwo: Department of Banking and Finance, Faculty of Administration, Nasarawa State University Keffi, Nasarawa State

International Journal of Research and Innovation in Social Science, 2024, vol. 8, issue 10, 3166-3182

Abstract: Despite extensive research on financial sector development, there is a lack of empirical studies specifically examining the combined effects of trade services and interbank placement on financial sector growth in Nigeria. This study examines the effect of trade services and interbank placement on financial sector development in Nigeria using time series data spanned a period of twelve (12) years 2012 to 2023. The study adopted the ex-post-facto research design and secondary data used in the study was sourced from CBN annual statistical bulletin for relevant years. Descriptive statistics, Correlation, Augmented Dickey Fuller Test (ADF), Autoregressive Distributed Lag Model (ARDL) and post estimation test were the main statistical tools used to analysis the data with the help of E-view 12 statistical package. The finding of this study revealed that trade services and interbank placement exerts a positive and significant effect on financial sector development. The study recommended that Nigeria should invest in modernizing trade services infrastructure, adopting advanced technologies like blockchain, and developing digital platforms for faster trade-related documentation and payments. Also, regulators should create a robust framework for interbank placements, ensuring stability and transparency as smaller banks’ participation can improve liquidity and trust, leading to a more resilient financial sector.

Date: 2024
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