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Bullion

Keywords

Monetary policy transmission, credit channel, real-sector growth, enterprises, financial intermediation.

Abstract

This article critically reviews monetary policy transmission in Nigeria and its implications for real-sector growth and enterprise performance. It demonstrates that the credit channel dominates, while the interest rate channel remains weak due to structural rigidities, low pass-through, and supply-side constraints. The exchange rate and expectations channels play contingent roles but are undermined by heavy central bank intervention and fiscal dominance. Transmission effectiveness is constrained by shallow financial intermediation (private credit <20% of GDP), financial dualism (large informal finance sector), fiscal dominance (CBN financing of government deficits), underdeveloped capital markets, and institutional weaknesses (weak contract enforcement, information asymmetries). These constraints impose asymmetric burdens on small and medium enterprises (SMEs), which are disproportionately harmed by monetary tightening due to limited access to alternative finance and higher information opacity. The paper proposes a novel conceptual framework integrating transmission channels, structural constraints, and enterprise heterogeneity. It identifies critical research gaps firm-level micro-mechanisms, non-bank intermediaries, comparative African perspectives, targeted policy instruments, digital finance, nonlinearities, expectations, and spatial dimensions and outlines a forward-looking research agenda. Key recommendations include strengthening banking competition, addressing fiscal dominance via statutory limits on ways and means, scaling credit guarantee schemes for SMEs, deepening capital markets, enhancing monetary-fiscal coordination, and developing a coherent digital finance regulatory framework.

Author Bio

Olusegun Timothy Odesola (MSc, MBA, PhD, MNIM) and Oluwatoyin Afolake Kayode- Akeremale PhD, are lecturers in the Department of Business Administration, Obafemi Awolowo University, Ile-Ife, Nigeria. Their complementary expertise spans operations research, innovation, entrepreneurship, knowledge management, human resource management, and organisational behaviour. Their research addresses green supply chains, SMEs, religiosity, operational performance, employee relations, talent management, women's entrepreneurship, and small business development in emerging economies. Both scholars have published in reputable peer-reviewed journals and contributed to multidisciplinary research. They are committed to sustainable business practices, policy-relevant scholarship, inclusive economic development, and management solutions that strengthen organisational performance and employee well-being

Publication Title

Bullion

Issue

3

Volume

50

First Page

36

Last Page

46

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Economics Commons

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