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Effects of Foreign Exchange Crisis on the Performance of Manufacturing Sector in Nigeria

Author

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  • Dr. Marshal Iwedi

    (Department of Banking and Finance, Rivers State University, Port Harcourt,Nigeria)

Abstract

The study examined the effect of foreign exchange crisis on the performance of manufacturing sector in Nigeria over the period of 35 years ranging from 1985 to 2019. The study proxy foreign exchange crisis by exchange rate of U.S to Nigeria, trade openness and foreign direct investment while performance of manufacturing sector was measured by manufacturing sector gross domestic product. Time series were used and sourced from central bank of Nigeria statistical bulletin for 2019. Ordinary least square (OLS) technique of regression was used to analyze the data. The R-square, T-statistics and F-statistics were used to determine the extents to which the explanatory variables affect the explained variable. The hypotheses formulated were tested at 5% level of significance using t-test. The results reveal that foreign exchange rate has a negative and significant effect on manufacturing sector GDP in Nigeria. Trade openness has a positive and significant effect on manufacturing sector performance while foreign direct investment has a positive and significant effect on manufacturing sector GDP in Nigeria. The study concluded that foreign exchange crisis plays a significant negative role in the performance of manufacturing sector in Nigeria. The study recommended that there should be pursuance of sustainable and stable exchange rate policy and to put in place, measures that will promote greater exchange rate stability.

Suggested Citation

  • Dr. Marshal Iwedi, 2021. "Effects of Foreign Exchange Crisis on the Performance of Manufacturing Sector in Nigeria," Noble International Journal of Economics and Financial Research, Noble Academic Publsiher, vol. 6(1), pages 01-07, January.
    • Handle: RePEc:nap:nijefr:2021:p:01-07
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    References listed on IDEAS

    as
    1. Chukwuma Agu, 2002. "Real Exchange Rate Distortions and External Balance Position of Nigeria: Issues and Policy Options," Journal of African Development, African Finance and Economic Association (AFEA), vol. 5(2), pages 20-47.
    2. Olufemi Saibu, 2014. "Capital Inflow and Economic Growth Nexus in Nigeria: The Role of Trade Openness," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 6(6), pages 99-113, December.
    Full references (including those not matched with items on IDEAS)

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