The Manufacturing Sector Development and Importation Effect on the Nigerian Economy

The Manufacturing Sector Development and Importation Effect on the Nigerian Economy

ABSTRACT

This research work on the manufacturing sector development and importation effect on Nigerian economy examines econometrically the impact of the manufacturing sector and importation effect on economic growth in Nigeria using a time-series data from the period of 1981 to 2016.

It assesses the effect of manufacturing output (mangdp), investment (inv), government expenditure (gov.exp),(imp), importation and money supply (ms) on the log of real gross domestic product (lrgdp).

Appropriate multiple regression models is specified with parameters, which are estimated using the ordinary least square (OLS) technique.

Test of the hypothesis is carried out and the result shows in the period under review, manufacturing output has a positive impact on economic growth in Nigeria.

However, the impact is statistically insignificant. The study found that imports has a positive and statistically significant impact on economic growth in Nigeria.

Government expenditure and money supply has no statistically significant impact on economic growth in Nigeria.

INTRODUCTION

The manufacturing sector plays a significant role in economic development. Industrialization acts as a catalyst that accelerates the pace of structural transformation and diversification of economic,

enable a country to fully utilize its factor endowment and to depend less on foreign supply of finished goods or raw materials for its economic growth, development and sustainability.

Industrialization which is a deliberate and sustained application and combination of appropriate technology, infrastructure managerial expertise and other important resources has attracted considerable interest in developing economies in recent times.

(Okafor, 2005) Exchange rate in Nigeria witnessed a radical change from the long operated fixed system between the 1960s and the first half of the 1980s.

References

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Aghion, Philippe and Peter Howitt (1992) “A Model of Growth through Creative Destruction”, Econometrica, 60(2), 323-351