The theorists of financial liberalization believed that the removal of government control in the operation of the financial system will lead to the development of the system which thus translates to the economic growth of a given economy. However, over the past three decades that the policy was implemented in Nigeria, the financial sector still cannot mobilize the required funds for public and private investment; hence the economy still remained grossly undeveloped. In view of this therefore, this study was designed to examine the effectiveness of financial liberalization in economic growth of Nigeria from 1970 to 2020. The required data for the study were sourced from various sources including Central Bank of Nigeria Statistical Bulletin and Annual Reports, and the World Bank Development Indicators among others. To eliminate the problem of spurious regression in the study, the technique of Phillips-Perron unit root test was employed. In addition, the long-run equilibrium relationship in the exogenous series was tested with the ARDL Bounds Test. More so, the Diagnostics tests of Jarque-Bera, Breusch-Godfrey Serial Correlation LM and Breusch-Pagan-Godfrey were also employed to test normal distribution, autocorrelation and Heteroskedasticity in the data, while Wilcoxon Test Statistic investigated the change in the pre and post deregulation periods. The findings revealed that official exchange rate and one period lag of real interest rate are positively and significantly related to the economic growth, while real interest rate without lag has negative and significant relationship on the economic growth of Nigeria. It was further revealed that credit to private sector and inflation rate have negative coefficients. Lastly, the study showed a significant change in gross domestic product per capita and official exchange rate in the pre- and post-liberalization peiods. We therefore recommend that a holistic reform that will strengthen the entire Nigerian financial system should be carried out immediately, in addition to creating enabling macroeconomic environment that will make private investment to thrive.