ABSTRACT

The service sector is a crucial component of every country’s economy, and it has been identified as a sector with the capability to become a significant driver of sustained growth in Africa. This study examines the Impact of Service Sector on Economic Growth in Nigeria from the period 1981 to 2019 using annual time series data sourced from the CBN statistical bulletin. The econometric approach of the paper is based on ordinary least square (OLS), Augmented- Dickey Fuller test, Johannsen Co-integration test and Granger Causality test. The study seeks to find if service sector has an impact on economic growth in Nigeria and to also investigate if there is causal relationship between service sector and economic growth in Nigeria. The study revealed that the model is statistically significant at 5% level of significance and it revealed that there is positive relationship between transportation, health services and information and communication and the dependent variable economic growth, and a negative relationship between the independent variable education and the dependent variable economic growth. However, the study recommends that there should be increase in the investment in the service sector with more focus on education to boost the growth of the GDP.