IMPACT OF INDUSTRIAL SECTOR ON ECONOMIC GROWTH OF NIGERIA
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IMPACT OF INDUSTRIAL SECTOR ON ECONOMIC GROWTH OF NIGERIA
Chapter one
INTRODUCTION
1.1 Background of the Study
In most emerging economies, industrialization is seen as a primary goal of economic policy. They consider industry and agriculture as necessary components of development and structural transformation.
According to some economists, industries have an important influence in a country’s economic development. This study paper attempts to analyse the impact of the industrial sector on Nigeria’s economic development.
In general, the industrial revolution that occurred in Britain between the late 18th and 19th centuries had much to do with the current setback in industrial development, which resulted in the factory process that metamorphosed into industrial production.
Thus, history shows that the industrial sector’s contribution to Nigeria’s economic progress is as old as the country itself. It dates back to 1914, when the country’s southern sections were amalgamated to form the geographical landmass known as Nigeria. Fr. Fredrick Lugard, a representative of Britain’s colonial authority.
As soon as Nigeria gained independence, the government implemented import substitution as an industrial strategy to address the deficit balance of trade and accelerate industrialization, among other things.
From the first national development plan (1962-1968) until the fourth national development plan (1981-1985), fast industrialization was prioritised in Nigeria’s development goals. During the third national development plan (1975-1980), the government sector allocated the maximum percentage of its budget to the manufacturing sector (16.2%).
The industrial policies and strategies of development were adoption of import substitution strategy, expansion of indigenous equity participation in foreign owned enterprises, provision of integration, linkages, and diversification of industrial increased domestic resource content of industrial products, and provision of financial and manpower resources to promote research and adoption of technology to encourage small and medium-sized industries and public sector participation.
To deal with the sector’s and the economy’s growing problems, Nigeria launched a structural adjustment programme (SAP) in 1986, with the expectation that it would solve these issues. It has substantial implications for both the government and industry.
It prompted the government to reassess the regulatory environment, the structure of protection for local sectors, and the package of incentives available.
SAP posed a new challenge to the private sector, particularly industrialists, indicating a more serious attempt to control costs, boost production efficiency, and maintain competitiveness.
In the spirit of SAP, the second tier foreign exchange market (SFEM) was established in 1987 to allow market forces to determine the foreign exchange rate, eliminate pricing distortions, and result in a more effective allocation of resources.
Because prior policies failed to meet expectations, the government implemented a new strategy to industrial growth in 1988, emphasising the role of the private sector.
To put this management strategy into action, the government established the National Committee on Industrial Development (NCID) in August 1988.
The strategic management of industrial development (SMID) or industrial master plan (IMP) is based on the need to organise a network of sectors (referred to as strategic consultative groups) around industrial activities with the goal of having a comprehensive and perception view of the investment problems in a specific line of industry. The (IMP) aims to reduce the challenges of policy and programme consistency in the growth of the nation’s industries.
Since the handover in May 1999, the Olusegun Obasanjo government has implemented a number of fiscal and monetary policies, as well as institutional reforms. With these steps, Nigeria is expected to become a major industrialised nation and economic powerhouse.
1.2 Statement of the Problem
Many economies rely on the industrial sector to drive value-added activities. Nigeria’s desire to industrialise must face various challenges. For the purposes of this study, it is necessary to assess the issues that are impeding industrialization.
The industrial sector faced the issue of poor price elasticity of export and a lack of comparative advantage. This means that Nigeria’s share of the foreign exchange market cannot increase despite several incentives provided to the industrial sector.
The lack of an indigenous entrepreneurship class, combined with other issues facing multinational corporations, has an impact on the structure and type of scientific and technological workforce utilisation for national growth.
Given that industrialization can have a negative impact on the country’s economic growth and development, one might reasonably question how effective Nigeria’s industrialization plans are.
1.3 Objectives of the Study
Despite the presence of manufacturing industries in the Nigerian economy, most industries have yet to achieve their economic development goals. As a result, this study investigates the aims listed below.
i. Determine the role of manufacturing in Nigeria’s economic development.
ii. To investigate how Nigeria’s industrial sector might be improved to play a more productive role in the country’s economic progress.
1.4 Hypothesis of the Study
The following hypotheses are tested in this study.
H0: The industrial sector’s contribution has no meaningful impact on Nigeria’s economic progress.
Hi: The industrial sector contributes significantly to Nigeria’s economic development.
1.5 Significance of the Study
This study is crucial because it will reveal the extent to which industrialization has contributed to Nigeria’s economic development. It will highlight some of the barriers to increased industrialization and output in Nigeria.
This paper will be useful to entrepreneurs and governments by advising them on the simplest way to commence on an industrial growth plan. This work is also relevant since it contributes to the current research on industrial production.
Furthermore, this research will benefit students studying economics, government, real prospective industrialists, investors, and other connected courses. Other researchers will see this work as valid content for their field of study.
Finally, because no knowledge is wasted, readers of this work will be interested to learn that rapid industrialization is the fastest path to economic development.
1.6 SCOPE OF THE STUDY
This research focuses on the impact of industrialization on Nigeria’s economic development. The date utilised is secondary data collected from the publication of the Central Bank of Nigeria’s statistical bulletin and the annual report of accounts. This study’s analytical tools included the t-test and regression analysis.
1.7 Limitations of the Study
A study of this nature cannot be done without some obstacles, and as such, it was constrained by various reasons, including:
TIME: While conducting this extensive research, the researcher was attending classes, preparing for exams, and engaged in other activities, as well as doing domestic duties. So the researcher did not have enough time to polish his job.
FINANCE: This work’s main drawback was a lack of financial resources. As a student, the researcher lacked financial independence. The resources, visits, and logistics required for this research were not effectively provided.
DATA: The contentious nature of the Nigeria data slowed our project. It took the researcher a long time to harmonise the data used in this research study.
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