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Macroeconomic Dynamics and the Manufacturing Output in Nigeria

Author

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  • Onakoya Adegbemi Babatunde

    (FCA PhD Department of Economics Babcock University, Ilishan - Remo, Nigeria)

Abstract

This paper examined the impact of the changes in the macroeconomic factors on the output of the manufacturing sector in Nigeria from 1981 to 2015. Preliminary evaluation of the data was conducted using both descriptive statistics and stationarity evaluation. The test indicated that not all the variables are normal. The occurrence of order integration at first level difference necessitated the deployment of the Johansen cointegration test. The findings revealed no short run association among manufacturing output and each of GDP, exchange rate, broad money supply and unemployment rate. Negative relationship existed amongst inflation rate, interest rate, exchange rate, broad money supply on one hand, and manufacturing output. The inflation rate and interest rate, were statistically insignificant. However, significant and positive relationship existed between GDP of the previous year and unemployment on the one hand and manufacturing output on the other, at 5 percent level. The results showed that manufacturing was a veritable engine of economic growth. The post estimation tests showed presence of serial correlation but evidence of heteroscedasticity existed which, made the model inefficient, but its estimator is still unbiased. The study recommended the harmonization of both fiscal and monetary policies for the attainment of macroeconomic stability and avoidance of rapid policy summersaults.

Suggested Citation

  • Onakoya Adegbemi Babatunde, 2018. "Macroeconomic Dynamics and the Manufacturing Output in Nigeria," Mediterranean Journal of Social Sciences, Sciendo, vol. 9(2), pages 43-54, March.
    • Handle: RePEc:vrs:mjsosc:v:9:y:2018:i:2:p:43-54:n:4
    DOI: 10.2478/mjss-2018-0024
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    Citations

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    Cited by:

    1. Mary Bosede Olufayo & Bamidele Olumilua, 2023. "The Impact of Macroeconomic Policy on the Mining Sector Output in Nigeria," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 10(11), pages 601-612, November.
    2. Zhang, Wenwen & Chiu, Yi-Bin & Hsiao, Cody Yu-Ling, 2022. "Effects of country risks and government subsidies on renewable energy firms’ performance: Evidence from China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 158(C).
    3. Unegbu Paul Ikechukwu & Prof. Uche Collins Nwogwugwu & Ebere, S. Nwokoye (Ph.D) & Amaka, G. Metu (Ph.D) & Ndubueze Ezindu (Ph.D), 2022. "Manufacturing Sector and Import Dependence in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 6(12), pages 555-561, December.
    4. Adeyemi A. Ogundipe & Favour O. Olarewaju, 2020. "Manufacturing Output and Labour Productivity: Evidence from ECOWAS," Academic Journal of Interdisciplinary Studies, Richtmann Publishing Ltd, vol. 9, September.

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