Effect of Financial Innovations on Economic Growth in Nigeria

Authors: Professor Theresa Udenwa & EKIYE, Alfred

Affiliation: Ph.D Student, School of Postgraduate Studies Nasarawa State University, Keffi

Corresponding Author: [email protected]

December 24, 2025

SIAR-Global Journal of Economics, Finance & Accounting

DOI: 10.5281/zenodo.18046778

Effect of Financial Innovations on Economic Growth in Nigeria

Research Article Management

Abstract

Abstract This study examined the relationship between financial innovations and economic growth in Nigeria from 2009 to 2024. Economic growth was measured using real gross domestic product (RGDP), while mobile payment and web payment transaction values were employed as proxies for financial innovation, reflecting the growing role of digital payment technologies in Nigeria’s financial system. The study utilized a time series econometric research design and sourced quarterly data from the Central Bank of Nigeria (CBN) Statistical Bulletin. The Autoregressive Distributed Lag (ARDL) bounds testing approach showed the existence of a long-run relationship between financial innovation indicators and economic growth. ARDL estimation results revealed that web payment transactions had a positive and statistically significant impact on RGDP in the long run (p < 0.05), whereas mobile payment transactions exhibited an insignificant relationship with RGDP over the study period. Short-run dynamics suggest modest immediate effects of financial innovation on economic growth. Based on these findings, the study recommends that government and financial institutions prioritize investments in digital infrastructure, such as broadband penetration, secure payment gateways, and server capacity, to sustain and enhance the growth-enhancing role of web-based payment systems in real GDP growth. The insignificant relationship between mobile payments and economic growth may be attributable to infrastructural constraints, regulatory challenges, low financial literacy, and limited integration with the formal economy, underscoring the need for targeted structural reforms and financial inclusion policies to strengthen their contribution to economic growth.

Keywords

Financial Innovation, Economic Growth, Web Payment, Mobile Payment, Real Gross Domestic Product

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Professor Theresa Udenwa & EKIYE, Alfred (2025). Effect of Financial Innovations on Economic Growth in Nigeria. SIAR-Global Journal of Economics, Finance & Accounting, Vol. 1, No. 2. DOI: 10.5281/zenodo.18046778

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Effect of Financial Innovations on Economic Growth in Nigeria

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SIAR-Global Journal of Economics, Finance & Accounting