 Corresponding author: Oladipo Abimbola O; Email: Copyright © 2023 Author(s) retain the copyright of this article. This article is published under the terms of the Creative Commons Attribution Liscense 4.0. Impact of financial development on economic growth in Nigeria Nkamnebe Edith O, Oladipo Abimbola O * and Ezenwobi Florence N Nnamdi Azikiwe University, Awka, Nigeria. World Journal of Advanced Research and Reviews, 2023, 20(02), 1300–1311 Publication history: Received on 25 September 2023; revised on 18 November 2023; accepted on 20 November 2023 Article DOI: https://doi.org/10.30574/wjarr.2023.20.2.2111 Abstract The study investigated the impact of financial development on economic growth in Nigeria utilising annual data from 1985 to 2022 sourced from the Central Bank of Nigeria Statistical Bulletins and World Bank indicators. The variables used in this study were real gross domestic product (RGDP), a proxy for economic growth as the dependent variable while credit to the private sector, a proxy for financial deepening, all share index (ASI), nominal exchange rate (ER), gross savings (GS), remittances (REM) and financial technology (Fin-Tech_dum) were all used as financial development indicators which are the independent variables. The method of analysis employed was the Auto-regressive Distributed Lag (ARDL) and the pairwise granger casualty test. The ARDL long run results show that all share index, exchange rate and financial technology positively and significantly affects economic growth; credit to the private sector and gross savings positively but insignificantly impacts on economic growth. However, remittances reveal a negative and insignificant impact on economic growth in Nigeria. The Pairwise causality test shows that there are three unidirectional causality which runs from economic growth to credit to private sector, financial technology and gross savings in Nigeria. In conclusion, the findings of the study validate the demand-following theory in Nigeria. The policy recommendation suggests that the Central Bank of Nigeria should promote the adoption of advanced financial technologies and implement cautious expansionary monetary policies in specific sectors to encourage investment and economic growth. Overall, these measures would boost investment and economic growth in the country. Keywords: Financial Development; Economic Growth; ARDL; Nigeria. JEL Codes: B26, G1, O16. 1. Introduction The basic measure of improvement in any economy is economic growth, which makes it an eminent macroeconomic goal in every nation. Economic growth reflects a rise in gross domestic product over time. It involves increased output, services and jobs to enhance citizens' financial well-being (Ogbulu & Torbira, 2012). This global indicator ranks nations like China and the US among the largest economies in the world. Nigeria, as a developing nation, ranks 31st globally in 2022 and is the wealthiest African country in terms of economic growth. Numerous factors, including human capital, technology and government spending have been theoretically and empirically proven to influence economic growth globally and financial development, as suggested by Okpara et al. (2018), is a key factor. Financial development can be defined as a process that signifies enhancement in activities like funding and elaborating on the operations of financial institutions, creating novel (innovative) financial products and cultivating markets for these products, alongside advancing the quantity, quality, and effectiveness of financial intermediary services (Okoye & Ezema, 2021). In the words of Slesman et al. (2019), financial development is described as a multidimensional concept that is determined by the effectiveness and efficiency of the financial sector, particularly the intermediation between the surplus and deficit units of the economy.