Analyzing The Relationship Between Digitalization and Economic Growth in Nigeria Using Autoregressive Distributed Lag (ARDL) Model
Nekenneri Jerome JAIMU, Barka Ishaya DABARI, Mathias Mathew MADU, Oluwaseun Adeniran SUNDAY
Keywords: Digitalization, economic growth, financial services, globalization, CBN
Abstract
This paper examines the relationship between digitalization and economic growth in Nigeria between 2012Q3 to 2020Q4 using the Autoregressive Distributed Lag (ARDL) approach. The rapid growth in information communication technologies (ICT) and the use of cellular technology in the expansion of digital financial transactions in Nigeria complicate undrstandings on how these have contributed to economic growth in the country. Thus, this study analyzed internet subscriptions and gross fixed capital formation data from telecommunications quarterly reports of the Nigerian Bureau of Statistics. Also, data on real gros domestic product (GDP), ICT contribution to GDP and digital financial services were sourced from the Central Bank of Nigeria statistics database. Empirical findings of this study revealed that there is a long-run relationship between digitalization and economic growth in Nigeria. Likewise, a long-run positive relationship was found between internet subscriptions, digital financial services, gross fixed capital formation and ICT contribution to GDP. However, the magnitude of the impact of digital financial services is low traceable to the slow pace at which the Nigerian population is adopting digital technologies and the diminished trust in digital financial services arising from the activities of Ponzi schemes. The study concludes that there is a positive relationship between digitalization and economic growth in Nigeria. Hence, targeted financial literacy campaigns should be carried out by financial institutions, Central Bank of Nigeria and civil society organizations to enable people better understand and make use of digital financial services that suit their needs and also increase their trust in these services.
Author Biography
Nekenneri Jerome JAIMU
Barka Ishaya DABARI
Mathias Mathew MADU
Department of Cooperative Economics and Management,
Adamawa State Polytechnic,Yola
Oluwaseun Adeniran SUNDAY
Department of Economics, Federal University Wukari
Correspondence: jeromejaimu@gmail.com