The Intensity of Financial Repression in Nigeria

Abstract

This paper focuses on financial repression in Nigeria and its intensity using data from the Central

Bank of Nigeria Statistical Bulletin to construct the financial repression index for Nigeria by

employing the summary measure of the Principal Component Analysis(PCA). Results indicated a

preponderance of financial repression over the study period of 1986-2020 and provided a financial

repression index at a measure of less than 30% over the study period. This measure is seen as far less

than average measures of financial repression from extant cross-country literature on Nigeria’s

financial repression index at the level 64.53% over the period of 1990-2009 and 39.08% average over

the period of over 1970-1997. The study concludes the presence of financial repression in Nigeria at a

magnitude that is reasonably lower than previously estimated from cross country studies in which

Nigeria was sampled