Nigeria’s financial system has undergone several reform policies which are aimed at accelerating growth of the economy. However, despite these policies put in place, growth continues to dwindle overtime. This indicates that Nigeria’s financial system is not efficiently performing its expansion parts and presently not in a position to drive growth and development in the economy. This study studied the empirical connection between financial development and economic growth in Nigeria for the period from 1987 to 2018. The study employed secondary data sourced from Central Bank of Nigeria (CBN) statistical bulletin and World Bank Development Indicators (WDI). This study adopted Autoregressive Distributed Lag (ARDL) model estimation technique. Using ADF stationarity test, Variables employed were found to be stationary at level 1(0) and first difference 1(1) respectively. Bound cointegration test indicated a long run link between financial development and Nigeria economic growth. Findings in this study likewise revealed that financial development have no significant influence on Nigeria’s economic growth. Specifically, findings indicated the coefficient of stock market capitalization to GDP ratio to be 0.6032 in the long run and 0.1203 in the short run. Real interest rate coefficient was 0.0341 in the long run and 0.0068 in the short run. The coefficient of exchange rate was 0.751 in the long run and 0.149 in the short run. This result showed that stock market capitalization, real interest rate and exchange rate influence economic growth in both the short-run and the long-run. Though, at 5% level of significance stock market capitalization, real interest rate was statistically insignificant. Furthermore, the coefficient of liquid liability to GDP ratio was -1.004 in the long run and - 0.2004 in the short run. Coefficient of credit to private sector was 1.1513 in the long run and 0.2296 in the short run. This indicated that credit to private sector contributed positively to growth in both the short run and the long run, while liquid liability has a negative effect on growth in both periods. Further, 19.95% of resulting disequilibrium in the economy is captured each period. On the basis of this empirical evidence, this study recommends that Nigeria’s government should focus on improving and strengthening the financial system. As such, this will enhance effective channeling of financial resources for productive investment projects. Furthermore, financial strategies should be geared towards encouraging a more competitive environment which will upsurges effective financial service delivery in Nigeria economy.

Keywords : Financial Sector Development, Nigeria’s Economic Growth, Autoregressive Distributed Lag (ARDL) Model.