REAL SECTOR OUTPUT AND ECONOMIC GROWTH IN NIGERIA
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REAL SECTOR OUTPUT AND ECONOMIC GROWTH IN NIGERIA
Chapter one
INTRODUCTION
Background of the study.
The real sector produces goods and services by combining raw materials with additional production elements such as labour, land, and capital. As a result, it serves as the primary driving force behind any economy, as well as the engine of growth and progress.
Agriculture, industry, construction, and services are all part of the real sector. Agriculture is further divided into crop production, livestock, forestry, and fishing, whereas industry includes crude petroleum and mineral gas, solid minerals, and manufacturing.
Services include transportation, communication, utilities, real estate and business services, education, and health.(pdfs.semanticscholar.org)
The sector is essential for a variety of reasons. First, the sector manufactures and distributes the tangible commodities and services required to meet aggregate demand in the economy.
Its performance serves as a barometer or indirect assessment of people’s living standards. Second, the sector’s performance can be utilised to evaluate the effectiveness of macroeconomic policy.
Government policies can only be considered successful if they have a positive impact on the production and distribution of goods and services, hence improving the welfare of the people.
Third, a thriving real sector, particularly agricultural and manufacturing industries, generates more links in the economy than any other sector, reducing economic pressures on the external sector.
Fourth, the real sector’s relevance is demonstrated by its capacity-building role as well as its significant potential for employment and revenue generation. (pdfs.semanticscholar.org)
Governments in any economy play an important role in determining the operation of the financial system and the extent to which financial services are expanded and made available to a greater variety of individuals, enterprises, and sectors (Demirguc-Kunt and Levine, 2008).
The financial environment is influenced by the level of political and macroeconomic stability, as well as the operation of legal, regulatory, and informational institutions.
The central bank, in the case of Nigeria, is responsible for defining the financial environment of the economy in order to stimulate growth. The CBN tries to increase long-term output and employment while maintaining price stability.
The key of achieving this goal is to minimise the uncertainties and distortions associated with high and fluctuating inflation, so creating an economic environment conducive to growth.
In recent years, the CBN has pursued these objectives by affecting financial circumstances, such as the cost and availability of credit, as well as asset values.
Against this backdrop, the study tries to investigate the role that the monetary authority can play to stimulate growth in the real sector and provide jobs for Nigeria’s teeming population.
Statement of the Problem
A well-developed financial system encourages investment by recognising and funding promising business prospects, mobilising funds, allowing for trading, hedging and diversifying risk, and facilitating the exchange of commodities and services.
These functions result in more efficient resource allocation, faster accumulation of physical and human capital, and the promotion of technical advancement, all of which contribute to economic growth.
As a result, an efficient financial system is one of the building blocks for long-term economic growth, which can stimulate job creation and economic development.
Without these, the economy will disintegrate. Against this backdrop, the researcher wishes to analyse the real sector output and economic growth in Nigeria.
OBJECTIVE OF THE STUDY
The study’s aims are:
Determine the relationship between real sector output and economic growth in Nigeria.
To determine whether the real sector can generate job prospects.
To find out whether the real sector boosts Nigeria’s GDP
Research Hypotheses
To ensure the study’s success, the researcher developed the following research hypotheses:
H0: no association exists between real sector output and economic growth in Nigeria.
H1: There is a link between real sector output and economic growth in Nigeria.
H02: The real sector cannot provide job possibilities.
H2: the real sector can generate job possibilities.
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