THE IMPACT OF MANUFACTURING SECTOR ON ECONOMIC GROWTH IN NIGERIA
Asongo Simon Ternenge and Apeh Ajene Sunday
Volume 1 Issue 1
Abstract
The study examined the impact of manufacturing sector on economic growth in Nigeria using time series data obtained from Central Bank of Nigeria statistical bulletin on real gross domestic product (RGDP), manufacturing capacity utilization (MCU), manufacturing output (MO), interest rate (INR) and labour force (LF) from 1981 to 2019. Autoregressive Distributed Lag (ARDL) technique was utilized for the analysis. The bounds cointegration test provides enough evidence of long-run relationships among the variables. The results showed thatMCU has positive, significant and inelastic influence on RGDP both in the short run and in the long run.Manufacturing output on the other hand has positive, inelastic but insignificant effect on RGDP in the short run but it is significant in the long run. Labour force has positive, significant and elastic effect on RGDP both in the short run and the long run.Interest rate has insignificant effect in explaining variation in RGDP both in the short run and long run.It is recommended that government should pursue favorable policy framework and provide necessary assistance, such as increasing investment in the area of capital market development, promote increased funding in the field of innovative technological advancement. Investment policies are expected to be flexible and more friendly in order in improve the contribution of the sector to economic growth and hence make the contribution of manufacturing capacity utilization as well as manufacturing output to exhibit an elastic influence on economic growth. Keywords: Autoregressive Distributed Lag (ARDL), Co-integration, Economic Growth, Manufacturing Sector
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