Bank Loans and Economic Growth in Africa; Evidence From Sectorial Allocation of Commercial Bank Loans in Nigeria: 2000-2025

This study broadly examines Bank Loans and Economic Growth in Africa; Evidence from Sectorial allocation of Commercial Bank Loans in Nigeria; 2000-202. The specific objectives are to determine the effect of agricultural sector loans, manufacturing sector loans, and export sector loans on Real Gross Domestic Product. To achieve these objectives, the study adopts an ex-post facto research design, utilizing secondary time-series data sourced from CBN Data. Econometric techniques of ARDL Base line and Bound test analysis were used, the empirical results reveal that commercial bank lending to the agricultural, manufacturing, and export sectors has a positive and statistically significant impact on RGDP in Nigeria. This indicates that sector-specific credit allocation plays a crucial role in stimulating productive activities and enhancing overall economic performance. The findings carry important policy implications, suggesting the need for deliberate financial policies that promote increased and sustained credit flow to these growth enhancing sectors, alongside improvements in loan accessibility and infrastructure support. The study concludes that efficient allocation of bank loan to priority sectors is vital for achieving sustainable economic growth in Nigeria. It therefore recommends that policymakers strengthen sector targeted loan schemes, enhance financial inclusion, and maintain a stable macroeconomic environment to maximize the growth inducing potential of commercial bank lending. The study is justified by the need to address the persistent mismatch between expanding bank credit and Nigeria’s sluggish economic growth by providing sector-specific evidence on how commercial bank lending to agriculture, manufacturing, and exports influences RGDP.