Getting a better view of financialization and its play in economic growth has been one of the determining factors of performing countries and underperforming countries for the past decades. Although Nigeria's economy has been declining for the past decades with all the measures put in place by the FG have all proven abortive.
It's high time Nigeria adopts the need for financialization in all sectors of the economy to boost the nation's revenue.
For years, global economies have gone through a series of trials to boost their economy, but in the long run, many still find themselves going through the hassle of fixing their economy. Although, they wouldn't be blamed because there have been changes recently that have caused a breach. The COVID-19, Russian, and Ukraine war, amongst other global hits, has affected many nations.
The first financialization foundation started in the '70s with the fall of the Bretton Woods System.
Ever since then, financialization has created vast opportunities in economies thereby promoting cash flows in the economy, proper valuation of the country's assets in the financial market, and provision of new job opportunities.
What is Financialization?
Financialization is defined as the growth of the financial market, financial institutions, financial motives, and financial global giants.
The benefits of financialization involve an increased number of job opportunities in the financial industry, an increase in domestic and international financial transactions, and an increase in cross-border financial flows.
On the other hand, financialization creates various opportunities in the economy such as promotion of funds flow in the economy, efficient utilization of assets and resources, provision of job opportunities, and efficient allocation of funds.
The growth of Financialization in any economy can be measured by its Industrial output which is the proportion of industrial employment and industrial profits. All these show if a country's financial services are increasing or decreasing.
The table below shows Nigeria's financialization with a few other countries.
With the decline in Nigeria's financialization as seen in the table, the country will need to take some measures to improve its ranking. If the country can work closely to see growth here, it will experience an increase in job availability, GDP, and improved HDI ranking.
Characteristics of a robust financial economy include, developed financial markets, developed services industries, and the focus of the use of spaces and advancement in information technology.