AN ASSESSMENT OF THE IMPACT OF INDUSTRIALIZATION ON ECONOMIC GROWTH AND DEVELOPMENT IN NIGERIA (1981 – 2016)

AN ASSESSMENT OF THE IMPACT OF INDUSTRIALIZATION ON ECONOMIC GROWTH AND DEVELOPMENT IN NIGERIA (1981 – 2016)

ABSTRACT

The impact of industrial development on Nigeria’s economic growth has been a frequent topic for examination during the last decade, as it is in every economy, particularly developing nations. Nigeria has had a long period of sustained economic growth since 2001, yet the industrial sector contributes very little to the country’s GDP. Several studies have found that industrial development leads to long-term economic growth. Thus, this study looked into the impact of industrial development on Nigeria’s economic growth. Consider the years 1981 to 2016 as your research period. E-Views The secondary data acquired from the CBN statistical bulletin was analysed using the statistical software version 7.0. GDP was employed as the dependent variable, with industrial production, foreign direct investment, interest rate, and exchange rate serving as the independent factors. The model explains that the influence of industrial output on economic growth is not statistically significant, despite the fact that the sign obtained from its àpriori expectation is positively connected to GDP (economic growth), but not strongly enough. R-squared indicates that 99% of the variation can be explained. Based on the findings, it is recommended that the government and its agencies ensure political stability while also implementing strategic policies that will create a level playing field for foreign investors, thereby improving the establishment of industries, particularly manufacturing industries, to encourage industrialisation of the Nigerian economy, which will facilitate the strengthening of economic growth (GDP).

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

The effects of industrialisation on economic development have been extensively explored. Few countries have been able to thrive and amass riches without investing in their manufacturing industries, and a robust and successful manufacturing sector typically leads to industrialisation.

The manufacturing sector is largely regarded as the best industry to fuel Africa’s development. This is owing to the industry’s labour-intensive and export-focused orientation. A country’s economic prosperity is directly proportional to its amount of exports.

Revenue is increased by adding value to things before they are sold, resulting in higher average earnings per input. Furthermore, the manufacturing sector is more sustainable and resistant to external shocks than commodities (KPMG, 2014).

Industrial development is thus defined as the use of modern technology, equipment, and machinery to produce commodities and services while easing human suffering and ensuring continuous progress in their welfare.

Modern industrial processes are distinguished by high levels of technological innovation, the development of managerial and entrepreneurial talent, and the upgrading of technical abilities, all of which boost productivity and better living conditions.

In awareness of this, successive Nigerian governments have continued to outline policy initiatives and programmes aimed at achieving industrial growth and development. This cannot be achieved until production capacity is used to a reasonable amount (Fashola 2004).

In Nigeria, as in many other developing countries, the term industry is mostly used as a synonym for manufacturing. This is because manufacturing is the most dynamic segment of the industrial sector.