Insurance Investments and Economic Performance in Nigeria
Abstract
The study looks at insurance investment and economic performance in Nigeria between 1996: Q1 and 2022:Q4. Secondary series were obtained without bias from the Central Bank of Nigeria's statistical database. At the 95 percent confidence level, the Johansen co-integration, VEC Granger Causality, and VECM were used. The presence of long-run form among the variables is demonstrated by Johansen co-integration; the absence of joint supports for gross fixed capital formation (GFCF) and gross domestic product (GDP) is demonstrated by the VEC Granger Causality (GDP). For VECM, shares and bonds, and real estate and mortgage investment significantly retard GFCF, whereas government securities only significantly reduce GFCF; government securities and shares and bonds are negative but significant to GDP, but real estate and mortgage investment significantly promotes GDP. In addition, we find that errors in the short run are corrected at a rate of 6% and 7.7% in the long run for GFCF and GDP, respectively. In conclusion, insurance investments have a negative impact on Nigeria's economic performance. As a result, we advocate for an increase in the breadth of the Nigerian exchange's product offering; the revitalization of failing and ailing firms in terms of restructuring, where most of the funds of insurance firms have been channeled; and a halt to investment in government securities, which slows economic performance. Furthermore, more funds should be committed to real estate and mortgage in order to stimulate economic progress, as it promotes economic progress infinitesimally.
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