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Abstract

This research diverged from previous studies by examining the moderating impact of financial development on the relationship between industrial performance and poverty reduction in Nigeria from 1981 to 2021, employing the Dynamic Ordinary Least Squares (DOLS) estimator. Also, FMOLS and CCR are adopted as robustness check. The findings indicate that industrial sector performance exacerbated poverty level in Nigeria; however, when interacted with financial development, it significantly mitigated poverty. The robustness analyses from FMOLS and CCR were consistent with DOLS estimates. Consequently, it is recommended that Nigerian monetary authority should develop financial sector by improving access, depth, and efficiency of financial institutions. Moreover, a policy should be implemented mandating commercial banks to allocate a certain percentage of financial resources for industrial expansion. These funds could be provided as interest-free loans or with minimal interest charges, and collaboration between key stakeholders such as the Manufacturers Association of Nigeria (MAN), Small and Medium Enterprises Development Agency (SMEDAN), National Association of Small-Scale Industrialists (NASSI), National Association of Small and Medium Scale Enterprises (NASME), and commercial banks should be established to ensure effective utilization. This will not only boost productivity and performance of industrial sector, but also generate job opportunities and income for the poor Nigerians.