THE NEXUS OF BEHAVIOURAL ECONOMICS, DIGITAL FINANCE AND SUSTAINABLE DEVELOPMENT: A MACROECONOMIC FRAMEWORK FOR NATIONAL GROWTH

Abstract

This study examines the nexus between behavioural economics, digital finance, and sustainable development within a macroeconomic framework for national growth in Nigeria. The study is motivated by the growing transformation of Nigeria’s financial system driven by fintech innovations, mobile banking, electronic payment systems, and digital financial inclusion initiatives, alongside persistent challenges of poverty, financial exclusion, and uneven economic development. It investigates how behavioural factors such as financial literacy, trust, risk perception, and cognitive biases influence the adoption and use of digital financial services, and how this adoption subsequently impacts sustainable development outcomes, including poverty reduction, employment generation, human development, and economic stability. The study adopts an ex post facto, time-series research design using secondary data from the Central Bank of Nigeria, the National Bureau of Statistics, the World Bank, the IMF, and other relevant databases. The analytical framework is anchored on an econometric model that links behavioural economics indicators, digital finance variables, and sustainable development indicators to national economic growth. The study employs descriptive statistics, unit root tests, cointegration analysis, and the Autoregressive Distributed Lag (ARDL) model to examine both short-run and long-run relationships among the variables. Findings from the conceptual and empirical synthesis suggest that behavioural economics significantly influences digital finance adoption, while digital finance enhances financial inclusion, productivity, and entrepreneurial activities. These outcomes collectively contribute to sustainable development and long-term national growth. The study concludes that integrating behavioural insights into digital finance policies is essential for maximizing the developmental impact of financial technologies in Nigeria. It recommends strengthening financial literacy programmes, improving digital infrastructure, and enhancing regulatory frameworks to support inclusive and sustainable economic development.