IMPACT OF THE MANUFACTURING SECTOR ON ECONOMIC GROWTH IN NIGERIA (1981- 2020)

Abstract

This study examined the Impact of Manufacturing Sector on Economic Growth in Nigeria. In line with the objectives of the study, secondary data were obtained from Central Bank Statistical Bulletin and World Bank Indicator covering the period of 1981 to 2020. The data was based on manufacturing capacity utilization, manufacturing sector output, inflation, exchange rate, technology, money supply, government expenditure and real interest rate. The study employed the Autoregressive Distributed Lag (ARDL), it employed the Augmented Dickey-Fuller (ADF), Phillip-Perron (PP) test the lag order of the ARDL models using VAR order selection criteria, the cointegration test and tested for long-run and short-run relationship. The results of the data showed that there exists a positive relationship between the manufacturing sector and economic in Nigeria. The results showed that manufacturing capacity utilization, manufacturing sector output, and real interest rate has a positive relationship with economic growth, while inflation, exchange rate, technology, government expenditure and money supply has a negative relationship with economic growth in the long run in Nigeria. Thus, the study recommends that the government should work on improving the infrastructural facilities in the country to aid investment and also encourage entrepreneurs. Also the central bank can make interest rate more assessable to investors to encourage investment in the manufacturing sector.