The Political Economy of Financial Sector Development in Sub-Saharan Africa: Nigeria as a Critical Case

Financial sector development in sub-Saharan Africa is shaped not merely by economic fundamentals but by the political economy of reform, where elite interests, institutional legacies, and distributional conflicts over financial rents determine which reforms are adopted, how they are implemented, and whether they produce their intended developmental outcomes. This study uses Nigeria as a critical case to develop a political economy theory of financial sector development applicable to resource-rich, ethnically heterogeneous developing economies. The theoretical contribution is a model of financial reform adoption that incorporates political coalition dynamics, distributional conflict between banking insiders and financial access claimants, and the role of international financial institutions in shifting domestic reform equilibria. The empirical application conducts a structured comparative-historical analysis of Nigeria's major financial sector reforms from 1986 to 2023, including interest rate liberalisation, banking consolidation, the universal banking model, pension reform, capital market development, and the ongoing fintech regulatory evolution. Elite interview data gathered from 40 former Central Bank of Nigeria governors, finance ministers, and banking sector leaders are analysed using process tracing and comparative narrative methods. Quantitative panel data on financial development indicators are used to assess the effects of reform episodes. The theoretical framework draws on the institutional theory of financial development, the political economy of banking regulation, and the historical institutionalism literature. The study generates original theoretical propositions that advance beyond existing endowment-based and legal origin theories of financial development. The PhD-level contribution lies in the theoretical innovation, the multi-method design, and the longitudinal depth of the analysis. Findings are expected to contribute to the comparative political economy literature and to practical policy debates on financial reform sequencing in Nigeria and comparable economies. Keywords: political economy, financial sector development, Nigeria, reform coalitions, institutional theory