IIARD International Institute of Academic Research and Development

Journal of Business and African Economy (JBAE )

E-ISSN 2545-5281
P-ISSN 2695-2238
VOL. 11 NO. 3 2025
DOI: 10.56201/jbae.vol.11.no3.2025.pg20.30

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Empirical Analysis of the Service Sector and Economic Growth Nexus in Nigeria

Adiga, Dauda Leviticus PhD, Mazeli, Edith Nkiruka PhD, Mbadiwe Mayor MSc, Uma, Idika Kalu MSc, Ejinkonye, Remigius Chinwoke PhD

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Abstract

This paper did an empirical analysis of the service sector and economic growth nexus in Nigeria. Background: Service sector’s contribution to GDP has declined slightly from average of 50% between 1982 and 1985 to 45% between 2020 and 2023. The disregard of the service sector and preference of the oil sector seem to be limiting the sector’s greater productivity. Aims: This study specifically sought to ascertain the nexus between trade; transportation & storage; information & communication; financial & insurance; real estate and GDP in Nigeria for the period 1981 to 2023. Methodology: This study adopted the ex-post facto research design. Annual time series data was obtained from CBN bulletin, 2023 and analyzed using descriptive statistics, ADF unit root test and OLS. The hypotheses were tested at 5% level of significance. This study consideredthe Fisher’s model of the stages of economic growth (Allen Fisher, 1939). Findings: There was no unit root among the variables. Trade had a significant effect (0.0165); Transportation & storage had a significant effect (0.0000); Information & communication had a significant effect (0.0000); Financial & insurance had a significant effect (0.0088); Real estate had a significant effect (0.0000) on GDP for the period reviewed. Also, the probability (f-statistic) was 0.000000, Durbin-Watson was 1.610388 while adjusted R2 value was 99.82%. Conclusion: The services sector is jointly significant and contributes to GDP of Nigeria. Recommendations: The government should continue the diversification of the economy, ensure that we produce more for consumption and export so as to better the GDP

keywords:

Trade, Transportation & storage, Information & communication, Financial & insurance, Real estate, Economic growth

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