The Impact of Manufacturing Sector on Economic Growth in Nigeria

Abstract

Abstract In this study, the effects of Nigeria's manufacturing sector on economic growth between 1981 and 2018 are examined. In order to examine the relationship between the specified explanatory factors and the growth of the Nigerian economy, the study uses the OLS regression methodology. The findings indicate that the manufacturing sector's output has a positive and significant link with the increase of the gross domestic product, indicating that it has a favorable impact on that growth. The fact that this variable is significant suggests that Nigeria's manufacturing industry is currently one of the country's main economic drivers. Additionally, there is a strong and positive correlation between capital and GDP, which suggests that capital can help drive GDP growth. The link between labor and GDP growth is both favorable and significant, indicating that labor has a beneficial impact on GDP. The link between foreign direct investment and gross domestic product is strong and positive, indicating that FDI has a beneficial impact on GDP growth. The link between exchange rate and GDP is both positive and insignificant, which suggests that Nigeria's exchange rate management is subpar. The fact that the manufacturing sector of the Nigerian economy is currently one of the country's main driving forces may be responsible for the considerable and favorable impact of manufacturing production on economic growth.