Digitalisation, Banking Stability and Nigeria's Economic Growth Trajectory

Sunday Enebeli-Uzor *

Research & Economic Intelligence, Zenith Bank Plc, Nigeria.

*Author to whom correspondence should be addressed.


The integration of digital technologies in banking operations has become a cornerstone of economic policy to promote financial stability and foster economic growth. This study examines the interplay between digitalisation and banking industry stability and economic growth in Nigeria. Annual time series data spanning 1981 to 2022, except for the digitalisation variable (web payment) which covers a shorter period, was collected from the Central Bank of Nigeria’s Statistical Bulletin. Using the Least Squares estimator to analyse the multiple regression model, the study found that digitalisation and financial deepening negatively impact economic growth due to digital prematurity and financial shallowness. However, bank stability and bank assets positively influence economic growth. The study concludes that although digitalisation and financial deepening have the potential to enhance growth, as seen in studies for other nations, Nigeria’s digital maturity level is too low to propel economic growth effectively. Nonetheless, stability in the Nigerian banking industry and bank assets contribute positively to the country’s economic growth trajectory. The study suggests that banks should invest more in digital transformation to foster economic growth. Additionally, banks should provide more credit to private sector and integrate the unbanked population into formal banking processes to enhance financial deepening, which is a key driver of growth in both aspiring and regional peer countries of Nigeria. Finally, banks should continue to build a strong asset base, not only for regulatory purposes but also to leverage large assets for valuation benefits, collateral for loans, risk exposure diversity, competitive advantage, and growth opportunities.

Keywords: Digitalisation, bank stability, economic growth, financial deepening, bank assets

How to Cite

Enebeli-Uzor, Sunday. 2024. “Digitalisation, Banking Stability and Nigeria’s Economic Growth Trajectory”. South Asian Journal of Social Studies and Economics 21 (7):176-85.


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