IMPACT OF MANUFACTURING SECTOR ON ECONOMIC GROWTH IN NIGERIA (1980-2015).
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IMPACT OF MANUFACTURING SECTOR ON ECONOMIC GROWTH IN NIGERIA (1980-2015).
Chapter one
INTRODUCTION
1.1 Background of the Study.
The prolonged economic recession caused by the collapse of the global oil market in the early 1980s, as well as the resulting steep drop in foreign exchange profits, has had a negative impact on Nigeria’s economic growth and development.
Other economic issues include excessive reliance on imports for both consumption and capital goods, dysfunctional social and economic infrastructure, an unprecedented drop in industrial capacity utilisation, and neglect of the agricultural sector, among others (Ku et al, 2010; Adesina, 1992). These have resulted in lower salaries and reduced living standards for Nigerians.
Although the structural adjustment programme (SAP) was implemented in 1986 to address these issues, no significant progress occurred. Nigeria, which was a middle-income nation in the 1970s and early 1980s, is now one of the world’s 30 poorest countries.
Putting the country back on track for recovery and prosperity will include urgently restoring degraded infrastructure and making more goods and services available to citizens at reasonable costs. This would entail a dramatic increase in output of goods and services.
To achieve economic recovery and expansion, production inputs such as land, labour, capital, and technology may need to be increased, as well as their productivity (Kayode and Teriba, 1977).
Increasing productivity should be the primary goal, as many other countries that have faced similar challenges have found solutions through productivity development programmes.
For example, Japan has prioritised high productivity in its economic planning since the conclusion of World War II, and the United States has done the same since the 1970s, with impressive results.
Furthermore, middle-income countries such as Hong Kong, South Korea, Singapore, and India have embraced productivity-boosting programmes as an intrinsic component of their national strategy, and they have made substantial inroads into global industrial markets.
Given the importance of high productivity in improving economic growth and people’s living standards, it is critical to assess the productivity of Nigeria’s manufacturing sector. This will be valuable in determining the relative efficiency of enterprises, sub-sectors, and industries.
Understanding the relative efficiency of industries in terms of economic growth and development could help the government plan its programmes and policies, particularly in determining which industries should be prioritised.
In view of the preceding, there is no better moment to assess the role of Nigeria’s manufacturing sector in the country’s economic growth and development than now.
1.2 Statement of Problem
The history of industrial growth and manufacturing in Nigeria is a classic example of how a country can overlook a critical industry due to policy inconsistencies and distractions caused by the finding of oil (Adeola, 2005).
Agriculture has been almost completely neglected, leaving many manufacturing and industries without a primary source of raw materials. The lack of locally obtained resources has resulted in limited industrialization.
High interest rates, unpredictable government policies, non-implementation of current rules, a lack of efficient regulatory bodies, infrastructural deficiencies, cheap product dumping, an unfair tariff regime, and low patronage are some of the restraints faced by this sector. In light of the aforementioned, this study aims to assess the function of the manufacturing sector in the Nigerian economy.
1.3 Objectives of the Study
The overall goal of this research is to evaluate the impact of the manufacturing sector on Nigeria’s economic growth.
The study’s particular aims are:
i. To examine the impact of investment in the manufacturing sector on Nigerian economic growth.
ii. Determine the economic impact of the manufacturing sector’s capacity utilisation.
iii. Determine the effect of manufacturing production on the economy.
1.4 Research Questions.
The study would look at the following questions:
1. How does investment in the manufacturing sector affect the overall economy?
2. Has capacity utilisation in the manufacturing sector impacted economic growth?
3. What is the impact of manufacturing production on the economy?
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