Main Article Content
The study investigates the impact of bank recapitalization on sectoral growth of Nigerian economy. Since it is a long run impact, the study examine a direct impact being bank credit and indirect impact being interest rate, inflation rate and exchange rate on the growth of the economy sectors (agricultural, service and manufacturing industry sectors) between the period 1990 and 2020. The study employed secondary data, which were obtained from Central Bank of Nigeria (CBN): CBN Economic and Financial Review Bulletin, CBN Monthly Reports, CBN Annual Reports, and Statements of Account of various years. The data were subjected to unit root, co integration and Error correction test. Augmented Dickey-Fuller (ADF) test were used to test whether the variables are non-stationary (unit root). An Error correction mechanism was employed to ascertain the speed of adjustment from the short run equilibrium to the long run equilibrium state, and while factors was determine using Ordinary least square (OLS). The result shows that bank credit is positively significant to the output growth of agricultural and service sectors but not to manufacturing sector. The above result supports government policy on recapitalization and can suggest that continuous improvement or increase on bank capital base will strengthen the banks, which will in turn aid in increase bank credit to economy sectors to enhance large production.