Assessment of the Impact of Manufacturing Sector on Economic Growth in Nigeria

Assessment of the Impact of Manufacturing Sector on Economic Growth in Nigeria.

ABSTRACT

The importance of manufacturing sector to the growth of any economy and survival cannot be overemphasized.

In an attempt to advance on this, this study attempts to investigate the assessment of the impact of manufacturing sector on economic growth in Nigeria from 1980 – 2015, Ordinary Least Square (OLS) econometric technique was used on time series data of relevant variables of manufacturing Output, investment and capacity utilization.

The study found that manufacturing output, investment and capacity utilization has a significant relationship with the economy. Meaning that manufacturing output, investment and capacity utilization exerts impact on economic growth via manufacturing sector of the economy.

The study recommends that efforts should be geared toward strengthening the macroeconomic, socio-infrastructural and institutional environment of the nation, thus bringing a good linkage between domestic and external institutions with the ultimate aim of properly harnessing funds so mobilized towards productive manufacturing sector of the economy.

INTRODUCTION

Prolonged economic recession occasioned by the collapse of the world oil market from the early 1980s and the attendant sharp fall in foreign exchange earnings have adversely affected economic growth and development in Nigeria.

Other problems of the economy include excessive dependence on imports for both consumption and capital goods, dysfunctional social and economic infrastructure, unprecedented fall in capacity utilization rate in industry and neglect of the agricultural sector, among others (Ku et al, 2010; Adesina, 1992).

These have resulted in fallen incomes and devalued standards of living amongst Nigerians.

Although the structural adjustment programme (SAP) was introduced in 1986 to address these problems, no notable improvement took place. From a middle-income nation in the 1970s and early 1980s, Nigeria is today among the 30 poorest nations in the world.

Putting the country back on the path of recovery and growth will require urgently rebuilding deteriorated infrastructure and making more goods and services available to the citizenry at affordable prices. This would imply a quantum leap in output of goods and services.

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