ABSTRACT
The manufacturing sector is significant to economic
development. In considering the Nigeria economic development experiences, this
study is an insight on how manufacturing sector can influence Nigeria’s
economic growth by facilitating the transfer of technology and other associated
benefits. The objectives of the study were to determine the impact of
manufacturing sector on Nigeria’s economic growth; and to investigate the major
constraints confronting the Nigerian manufacturing sector. Data for the study
was obtained from secondary sources, and the technique used in this research
was the ordinary square regression method. The endogenous growth model was
adopted as the theoretical framework of analysis. The study found out that industrial
output is not statistically significant in terms of its influence on economic
growth. Recommendations were made that; Government must ensure
political stability and also invest in the people, since high economic
performance is a function of the people working in the country (Capacity
Development); Government should pursue favorable
policy framework and provide necessary infrastructures and create an enabling
environment that will foster huge investment in research and development.
CHAPTER ONE
1.1
Background
of Study
The
manufacturing sector plays a significant role in economic development.
Industries act as a catalyst that accelerates the pace of structural
transformation and diversification of economy to enable a country to fully
utilize its factor endowment and to depend less on foreign aid and supply of
finished goods or raw materials for its economic growth, development and
sustainability. In other words, in Nigeria, it has always been realized that
economic development requires growth with structural change. In considering the
Nigeria economic development experiences therefore, it is instrumental to
examine the growth and structural change in certain major aspects of the
economy (Ajakaye, 2002).
Productivity
is more in the manufacturing sector than in the agricultural sector.
The
extended economic recession occasioned by the collapse of world oil market from
the early 1980s and the associated 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 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
caused fallen incomes and devalued standards of living amongst Nigerians.
Despite the
introduction of structural adjustment programme (SAP) in 19986, was 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. The path to economic recovery and growth may require increasing
production in puts land, labour, capital and technology and or increasing their
productivity (Kayode and Teriba 1997).
A
knowledge of the relative efficiency of industries in relations to economic
growth and programs and polices especially in deciding on which industries
should be accorded priority. In the light of the foregone, there cannot be a
more appropriate time to evaluate the role of Nigerian manufacturing sector in
the economic growth and development of the country than now.
1.2 Statement of problem
The
Nigerian industrial development and manufacturing in Nigeria is a classic
illustration of how a nation could neglect a vital sector through policy
inconsistencies and distraction attributable to the discovery of oil (Adeola
2005). That the country’s oil is not major source of employment, and its
benefit to the other sector in the economy is limited since the government has
not adequately developed the capacity to pursue the more valued-added
activities of the petrochemical value chain. As a result, the oil industry does
not allow for any agglomeration of the technological spillover effects, Ogbu
(2012) stresses.
Upon
several government policies on the stability of Nigeria economy through
manufacturing industry, there have been a lot of challenges facing the growth
of Nigerian manufacturing sector as industrial by researcher. These challenges include: corruption and
ineffective policies (Anyanwu 2007); lack of integration of macroeconomic plans
and the absences of harmonization coordination of fiscal policy (Onoh, 2007),
gross mismanagement/misappropriate of public funds (Okemini and Uranta, 2008);
and lack of economic potential for economic growth and development (Ogbele
2010). Despite the emphasis placed on fiscal policy in the management of the
economy, the management of the economy, the manufacturing sector inclusive,
Nigerian economy is yet to come on the path of sound growth and development
because of low out output in the manufacturing sector to the economy (GDP).
The near
total neglect of agriculture and industries their primary source of raw
materials. The absence of locally sourced imparts has resulted in low
industrialization
Some of the
constraints traced in this sector include:
High interest rate
Ø Dumping
of cheap products
Ø Infrastructural
in adequate
Ø Lack of
effective regulatory agencies
Ø Unpredictable
government policies
Ø Non-implementation
of existing policies
Ø Low
patronage
Ø Unfair
tariff regime
1.3 Research Questions
The study would examine the following questions:
1.
To what extent has the Nigerian manufacturing sector
contributed to the economic growth?
2.
What the major constraints confronting the Nigerian manufacturing
sector?
1.4 Objective of the study
This study has the central objective of exploring
issues relating to how manufacturing sector can influence Nigeria’s economic
growth by facilitating the transfer of technology and other associated
benefits, while in specific terms the study is set to.
1.
To determine the impact of manufacturing sector on
Nigeria’s economic growth.
2.
To investigate the major constraints confronting the
Nigerian manufacturing sector.
1.5 Research hypothesis
The hypothesis tested in the course of the analysis is
stated below:
1.
The manufacturing sector does not contribute
significantly to the Nigeria economy.
2. There exist
major constraints confronting the Nigerian manufacturing sector.
1.6
Significance
of the study
The
study will contribute greatly in aiding the government, policy makers, economic
planners, researchers and the academia generally. This will provide an insight
and understanding to the government on how to be prudent in spending public
funds to boost the manufacturing sector to bring about economic growth and
development.
It
will influence various economic units both in the public and private sectors of
the Nigerian economy. The research report will be a veritable source of
information to various categories of students as well as researchers wishing to
conduct further research in this area. The findings of this research will
assist monetary authorities in assessing the performance of the fiscal policy
in Nigeria particularly in terms of their impact on the output of manufacturing
sector. This work is also immense benefit to the policy makers and economic planners
in terms of using its findings in formulating and implementing appropriate
policy measures towards accelerating economic growth through the manufacturing.
1.7
Scope of
the study
The
study shows the role of Nigerian manufacturing sector in relation to the growth
of the economy.
The
major constraints that confronting the sector would be identified in the course
of examining the overall development in the sector. The analysis of the
contribution of the manufacturing sector to the economic growth of Nigeria is
restricted to the period between 2013 and 2017 using only relevant performance
indicators such as index of manufacturing production, manufacturing capacity
utilization rate.
1.8 Definition of terms
1. Productivity: Is an economic measure of output
per unit of input. Inputs include labour and capital while output is typically
measured in revenues and other gross domestic product (GDP) components such as
business inventories.
2. Economic development: The focus of federal,
state and local government to improve our standard of living through the
creation of jobs, the support of innovation and new ideas, the creation of
higher wealth and the creation of overall better quality of life.
3. Trade liberalization: This is the removal or
reduction of restrictions or barriers on the free exchange of goods between
nations. This includes the removal or reduction of tariff obstacles, such as
duties and surcharges and non-tariff obstacles such as licensing rules, quotas
and other requirements.
4. Industrial Policy: Industrial policy of a
country sometimes denoted IP, is its official strategic effort to encourage the
development and growth of part or all of the manufacturing sector as well as
other sectors of the economy.
5. Economic liberalization: This is the
lessening of government regulations and restrictions in an economy in exchange
for greater participation by private entities, the doctrine is associated with
classical liberalism.
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Item Type: Project Material | Attribute: 54 pages | Chapters: 1-5
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