Manufacturing Sector and Import Dependence in Nigeria

This study uses secondary data to examine the relationship between the manufacturing sector and import dependence in Nigeria, paying particular attention to the effects of imported intermediate, capital, and manufactured goods (herein referred to as import dependence) on the performance indicators of the manufacturing sector (such as manufacturing output growth, capacity utilization, value added, employment rate, and export adopted in the study). Error Correction Mechanism (ECM) was used to provide empirical evidence for the relationship between manufacturing sector performance (dependent variable) and import dependence. The study adopted Augmented Dicky-Fuller (ADF) for unit root test analysis, Autoregressive Distributed Lag (ARDL) bounds test for cointegration test analysis, and (independent variable). Evidence of a long-term association between the performance of the manufacturing sector was found by the ARDL bounds cointegration test.It was discovered from the empirical findings among others that only import of capital contributed positively to all indicators of manufacturing sector performance adopted in the study. Based on the findings, the study recommends that government should adopt import substitution strategy and make import only for capital and partially for intermediate goods that cannot be produced domestically, while, the importation of manufacutured goods should be discouraged at all cost in Nigeria. Thus conclude that on the average Nigeria’s manufacturing sector is surrounded with doubting benefits and may not be good enough to set economic growth and developmental platform required in the economy.