Impact of Industrial Sector Growth on Nigeria Economy

Abstract

Successive administrations in Nigeria have initiated one policy or the other aimed at advancing the economy through industrialization. In spite of these industrial policies, Nigeria is still at the bottom rung of development ladder as the industrial sector which was at a time contributing about 13 per cent to the GDP, and second largest employer of labour is now in comatose. Owing to this fact, this research is centered on the impact of industrial sector on Nigeria economy. It covers a period of 31years from 1990-2021. The data used for the analysis are secondary data sources from Central Bank Nigeria (CBN) Statistical Bulletin and other sources. The method of analysis adopted for the study is Ordinary Least Square (OLS). Cointegration test was also used to check the long run relationship among the variables. From the result of the OLS, it is observed that industry value added, gross capital fixed formation, labor force participation rate and trade openness which are the explanatory variables have a positive impact on economic growth in Nigeria and a long run relationship exists among the variables. The study therefore recommends that the nation’s industrial capacity should be utilized to avoid idle human and material resources. The study suggests that more labor should be employed and capital formation be encouraged to induce investment.