Real sector performance amid financial globalization: The Nigeria growth prospects

Abstract

Financial globalization has drawn so much attention and has been identified as the major cause of the global financial crisis. With clear evidence of financial globalization in Nigeria, agreement on the magnitude and net effect on the nation’s economic sectors has not received more research attention. This article aims to investigate how Nigeria's sectoral performances are impacted by financial globalization. The sectors of interest include Trade, Agriculture, Construction, Industrial and Service. Annual Time series data for the period, 1981-2019 was analysed using a Classical Linear Regression Method in an Error Correction Framework. Results established a strong significant association between financial globalization, construction and trade sectors. It indicates the insignificant consequences of financial globalization on the industrial, service, and agricultural sectors, respectively. The result further finds that terms of payment impact the agricultural sector, while terms of trade impact the industrial sector, respectively. The exchange rate is the only variable that shows a significant negative impact on the five selected sectors. The article suggests that government and monetary authorities concentrate on stabilizing the currency rate since doing so improves terms of trade, builds local capacity, and boosts sectoral performances.