Financial Inclusion and Macroeconomic Performance in Nigeria

Abstract

This study empirically investigated the relationship between financial inclusion and three critical dimensions of macroeconomic performance in Nigeria, inflation, aggregate investment, and real gross domestic product (GDP) in Nigeria over the period 2010Q1 to 2025Q4. Drawing on quarterly time series data sourced from the Central Bank of Nigeria (CBN), the National Bureau of Statistics (NBS), and the World Bank, the study employed Autoregressive distributed lag (ARDL) model as estimation method, applied to three distinct but interrelated models: inflation – investment - real gross domestic product models. The findings revealed that credit to the private sector, microcredit volume, ATM density, mobile transaction values, and deposit mobilization exerted statistically significant influences on inflation, investment formation, and real output growth. Specifically, deeper financial inclusion contributed to moderate inflation control, stimulated capital formation through SME financing and mobile banking penetration, and accelerated real GDP growth via domestic savings mobilization and broadened credit access. The study concluded that there is the need to integrate financial inclusion targets within the broader monetary and fiscal policy frameworks in Nigeria. And therefore, recommended amongst other things, that strengthening the regulatory framework for mobile money operators to encourage competitive pricing and deepen the adoption of cashless transactions; and channeling a greater share of CBN intervention funds toward microcredit institutions that serve agricultural households and informal sector operator would address both the depth and the geographic breadth of financial inclusion to yield dividends for price stability, capital formation, and long-run output growth across Nigeria.