Project Materials

THE IMPACT OF INDUSTRIALIZATION ON ECONOMIC GROWTH IN NIGERIA (1980-2010)

ABSTRACT

The goal of this research is to look at how industrialisation affects economic growth in Nigeria. Because of the relationship between industrialisation and economic growth, both theoretical and econometric analysis are used to examine the contribution of industrialisation to economic growth in Nigeria from 1980 to 2010, with GDP as the dependent variable and industrial output, labour force, capital stock, and human capital as independent variables. The findings indicate that industrial output and capital stock have a major impact on economic growth, whereas human capital and labour force do not. The detailed results are as follows: an increase in industrial output by one unit increases GDP by two times; an increase in capital stock increases GDP by more than 100 times; an increase in human capital does not stimulate an increase in GDP because the t-statistic is insignificant; and the same observation about human capital applies to labour supply. Overall, the corrected R2 value indicates that the model has an explanatory power of up to 92%. The study recommends that the government develop policy measures to improve formal education so that graduates are relevant to the country’s industrial needs, improve legal frameworks to protect human and property rights, and improve social and economic infrastructure to make the industrial sector competitive.