Merger and acquisition as a catalyst for economic development in Nigeria’s financial sector

This study examines merger and acquisition (M&A) as a strategy for enhancing economic development in Nigeria’s financial sector. Despite several banking reforms and consolidation exercises in Nigeria, there remains limited empirical evidence on the long-term effect of mergers and acquisitions on bank efficiency and economic development. This study addresses this gap by evaluating the performance of Nigerian banks before and after merger activities using selected bank efficiency indicators. The study relies on secondary data obtained from the Central Bank of Nigeria (CBN) Statistical Bulletin and the Nigeria Deposit Insurance Corporation (NDIC) Annual Report. A sixteen-year time series dataset covering pre- and post-merger periods was analyzed using the Ordinary Least Squares (OLS) technique with Econometric Views (E-Views) version 7. Findings reveal that mergers and acquisitions significantly improved bank efficiency and strengthened the capacity of banks to support economic activities through effective financial intermediation. The study contributes to existing literature by providing empirical evidence on the role of banking sector consolidation in promoting financial stability and economic development in Nigeria. Recommendations were made to enhance regulatory policies and sustain efficiency gains in the banking industry.