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This paper examines the effect of exchange rate fluctuations on the Nigerian manufacturing sector during a twenty five (25) years period (1986 – 2010). The argument is that fluctuation in exchange rate adversely affects output of manufacturing sector. This is because Nigerian manufacturing is highly dependent on import of input and capital goods. The methodology adopted for this study is empirical. The econometric tool of regression was used for the analysis. The population target of this study is the total number of 25 years from (1986 – 2010) (25) annual time series as data relating to other years after 2010 are not available. The used in this study is the secondary source of data. The data to be utilized in this study we be sourced through library research, publications of the Central Bank of Nigerian (CBN) i.e. statistic bulletin, National Bureau of Statistic(NBS), on line information and economic journals. Based on the findings, the researcher found out that exchange rate has no significant effect on economic growth of Nigeria also that there is no significant effect of fluctuation on exchange rate on the manufacturing sector. Some recommendations for policy were made based on the findings. Amongst others is the need to strengthen the link between agriculture and manufacturing‟s sector through local sourcing of raw materials thereby reducing reliance of the sector on import of input to a reasonable level

Table of content

Approval page iDedication iiAcknowledgement iiiAbstract iv

Chapter One

Introduction1.1 Background ofthe Study 11.2 Statement ofthe Problem 31.3 Objectives ofthe Study 51.4 Research Questions 61.5 Formulation of Hypothesis 61.6 Significant Of the Study 71.7 Scope and Limitations Of The Study 81.8 Definition of Terms 9viii

Chapter Two

Introduction2.1 Review of Related Literature 102.2 Theoretical Concept Of Exchange Rate 182.3 Theoretical Frame Work for Exchange Rate Fluctuation andManufacturing Output 182.4 The Objectives of Exchange Rate Policy in Nigeria 202.5 Types of Exchange Rate 232.6 Factors Affecting Rate Of Exchange 252.7 Fluctuation inThe Exchange Rate Of The Naira 262.8 Factors Influencing TheDetermination Of Exchange Rates 272.9 Factors That Can Affect The Manufacturing Process 292.10 Factors That Causes The Currency Fluctuation 332.11 Manufacturing Sector 362.12 Overview of Manufacturing 49

Chapter Three

Introduction3.1 Research Methodology 643.2 Research Design 653.3 Source of data 653.4 Research Instrument 663.5 Reliability And Validity Of Research Instrument 663.6 Population Of The Study 663.7 Sample And Sampling Procedure 673.8 Method Of Data Analysis 673.9 Decision Criterion For Validation Of Hypothesis 70

Chapter Four

Introduction4.0 Presentation and Analysis of Data 714.1 Presentation of Results 724.2 Results 73

Chapter Five

Summary ofthe Findings, Conclusion and Recommendations5.1 Summary ofthe Findings 775.2 Conclusion 785.3 Recommendation 79BIBLIOGRAPHY 81APPENDIX


INTRODUCTION1.1 BACKGROUND OF THE STUDYFollowing the fluctuation of the naira in 1986, a policy induced by the structural adjustment programme (SAP), the subject of exchange rate fluctuation has become a topical issue in Nigeria. This is because it is the goal of every economy to have a stable rate of exchange with its trading partners. In Nigeria, this goal was not reached in spite of the fact that the country embarked on devaluation to promote export and stabilize the rate of exchange. The failure to realize this goal subjected the Nigerian 


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