BACKGROUND OF THE STUDY - CONTACT US FOR THE FULL WORK
It has been argued that the fastest trend through which a nation can
achieve sustainable economic growth and development is neither by the level of
its endowed material resources, nor that of its vast human resources, but
technological innovation, enterprise development and industrial capacity. For
instance, despite its poor natural resources, and the hurdles it faced from 1920s
chronic inflation, Germany has effectively exploited the manufacturing sector
and rose up to become the largest economy in Europe and the fourth largest in
the world.
In the modern world, manufacturing sector is regarded as a basis for
determining a nation's economic efficiency (Amakom, 2012). However, after the
discovery of crude oil in Nigeria in the late 1950s, the nation has shifted
from its preeminent developing industrial production base and placed heavy
weight on crude oil production (Englama, et al. 2010); not only has this
jeopardized its economic activities, it also aggravated the nation's level of
unemployment. Nigeria as a giant of Africa has for long been regarded as a
nation blessed with abundant human and material resources; however, the
underutilization of these potentials has amplified widespread poverty, low
standard of living at individual level and rising unemployment in the country
as a result of incessant mono-economic practice and drastic neglect of other
sectors of the economy such as agriculture, tourism, mining and the
manufacturing industry.
In spite of the country's vast oil wealth, the World Bank Development
Indicators (2012) has shown that majority of Nigerians are poor with 84.5 per
cent of the population living on less than two dollar a day. The United Nations
Human Development Index (2011) also ranks Nigeria 156 out of 179 countries,
which is a significant decrease in its human development ranking of 151 in
2004; and World Bank Development Indicators (2012) have placed Nigeria within
the 47 poorest countries of the world. The issue of poverty can be easily
traced to mono-economic practice and underutilization of the nation’s endowed
resources, especially in manufacturing sector, which could have opened up
windows of opportunity in job creation and economic development.
Putting the country back on the path of recovery and growth will require
urgently rebuilding deteriorated infrastructure and making more goods and
services available to the citizenry at affordable prices. This would imply a
quantum leap in output of goods and services. Ogbu (2012) states that no other
sector is more important than manufacturing in developing an economy, providing
quality employment and wages, and reducing poverty. Increasing productivity should
be the focus because many other countries that have found themselves in the
same predicaments have resolved them through productivity enhancement schemes.
For instance, Japan from the end of the World War II and the United States of
America from the 1970s have made high productivity the centre point of their
economic planning and the results have been resounding. Also, middle income
countries like Hong Kong, South Korea, Singapore and India have embraced
boosting productivity schemes as an integral part of their national planning
and today they have made significant in-roads into the world industrial
markets.
Given the importance of high productivity in boosting economic growth and
the standards of living of the people, it is necessary to evaluate the role and
performance of the Nigerian manufacturing sector. In the light of the
foregoing, there cannot be another appropriate time to evaluate the role of the
Nigerian manufacturing sector in the economic growth and the development of the
country than now.
STATEMENT OF THE PROBLEM - CONTACT US FOR THE FULL WORK
The history of industrial development and manufacturing in Nigeria is a
classic illustration of how a nation could neglect a vital sector through
policy inconsistencies and distractions attributable to the discovery of oil
(Adeola, 2005). However, Ogbu (2012) argues that the country’s oil industry is
not a major source of employment, and its benefit to the other sectors in the
economy is limited since the government has not adequately developed the
capacity to pursue the more value-added activities of the petrochemical value
chain. As a result, the oil industry does not allow for any agglomeration or
technological spillover effects, Ogbu (2012) stresses.
From a modest 4.8% in 1960, manufacturing contribution to GDP increased
to 7.2% in 1970 and to 7.4% in 1975. In 1980 it declined to 5.4%, but then
surged to a record high of 10.7% in 1985. By 1990, the share of manufacturing
in GDP stood at 8.1% but fell to 7.9% in 1992; 6.7% in 1995 and fell further to
6.3% in 1997. As at 2001 the share of manufacturing in GDP dropped to 3.4% from
6.2% in 2000. However, it increased to 4.16% in 2011 which is less than what it
was in 1960. Currently, Nigeria’s manufacturing sector’s share in the Gross
Domestic Product (GDP) remains minuscule (CBN, 2011). Compare that to the
strong manufacturing sectors in other emerging economies, where structural
change has already occurred and where millions have been lifted out of poverty
as a result: manufacturing contributes 20 percent of GDP in Brazil, 34 percent
in China, 30 percent in Malaysia, 35 percent in Thailand and 28 percent in
Indonesia (Ogbu, 2012). The more recent experiences of the East and Southeast
Asian economic transformations demonstrate that diversification into
manufacturing and industrial production facilitated by what Arthur Lewis calls
the “intelligent governments” are critical to poverty reduction. However,
Nigeria has no effective industrial policy that promotes manufacturing; at
least not in the sense of policy which provides practical solutions to the
difficulties encountered by incipient entrepreneurs or emerging manufacturing
firms. It is in the light of the foregoing that this study seeks to evaluate
the role of the manufacturing sector in the Nigerian economy.
OBJECTIVES OF THE STUDY
The broad objective of this study is to appraise critically, the
performance of Nigerian manufacturing sector.
The specific objectives of the study include:
1. to investigate the impact of the manufacturing sector on the economic
growth and development of Nigeria.
2. to assess the level of productivity in the Nigerian manufacturing
sector.
3. to identify the major constraints confronting the Nigerian
Manufacturing sector.
4. to find out the various policies measures available to the government
that can be used to redress the persistent decline in the manufacturing
production.
RESEARCH QUESTIONS - CONTACT US FOR THE FULL WORK
The study would examine the following questions:
1. To what extent has the Nigerian manufacturing sector contributed to
the economic growth and development of the country?
2. What has been the performance of the Nigerian manufacturing sector?
3. What are the constraints that are confronting the manufacturing
sector?
4. What policy measures could be adopted to redress the persistent
decline in the manufacturing production?
RESEARCH HYPOTHESIS - CONTACT US FOR THE FULL WORK
The hypothesis tested in the course of the analysis is stated below:
H0 : that the manufacturing sector does not contribute significantly to
Nigerian economy.
H1 : that the manufacturing sector contributes significantly to Nigerian
economy.
RESEARCH METHODOLOGY
The analysis that will be made in this study shall be based on time
series data for the Nigerian manufacturing sector and macroeconomic data. Due
to the linearity nature of the model formulation, Least Square (LS) estimation
method would be employed in obtaining the numerical estimates of the
coefficients in the model using Statistical Software for Social Sciences
(SPSS).
Two simple regression models were used in the estimation. The first model
seeks to investigate the effect of manufacturing capacity utilisation on the
Gross Domestic Product (GDP), while the second model seeks to examine the
impact of index of manufacturing production on the Gross Domestic Product
(GDP). The estimation period is restricted to the period between 1980 and 2011.
The data for this study would be obtained mainly from secondary sources;
particularly from Central Bank of Nigeria (CBN) publications such as the CBN
Statistical Bulletin, CBN Annual Reports and Statements of Accounts etc.
SIGNIFICANCE OF THE STUDY - CONTACT US FOR THE FULL WORK
The study of role of manufacturing sector on the economic development of
Nigeria is significant in the following ways:
i. it will help to reveal the role of industrial activities in solving
the basic problems of unemployment, inflation, budget deficit and general
economic disequilibrium;
ii. it equally assist to appraise the policies of the government that
have been directed towards the improvement of local production;
iii. it will expose the forces behind the continued pressure on balance of
payment in spite of the various policy measures taken so far to address the
situation.
SCOPE OF THE STUDY
This study evaluates the role of the Nigerian manufacturing sector in
relations to the growth of the economy. The major constraints that confronting
the sector would be identified in the course of examining the overall
development in the sector. The analysis of the contribution of the
manufacturing sector to the economic growth of Nigeria is restricted to the
period between 1980 and 2011 using only relevant performance indicators such as
index of manufacturing production, manufacturing capacity utilisation rate,
manufacturing sector growth rate.
PLAN OF THE STUDY
This study shall be divided into five chapters. The first chapter
provides the background of the subject matter justifying the need for the
study. Chapter two presents related literature on the subject matter. The
research methodology, which includes the research design, sources of data,
model formulation, estimation techniques etc are stated in chapter three while
data presentation and analysis were made in chapter four. Concluding comments
in chapter five reflects on the summary, conclusion, recommendations and
suggestion for further studies based on the findings of the study.
REFERENCES - CONTACT US FOR THE FULL WORK
Adeola, F. A. (2005) Productivity performance in developing countries:
Case study of Nigeria. United Nations Industrial Development Organization
(UNIDO) Report.
Amakom, U. (2012) Manufactured Exports in Sub-Saharan African Economies:
Econometric Tests for the Learning by Exporting Hypothesis. American
International Journal of Contemporary Research. Vol. 2, no. 4, pp. 195-206.
Central Bank of Nigeria (2011) Statement of Accounts and Annual Reports.
Abuja: Central Bank of Nigeria.
Englama, A.; Duke, O.; Ogunleye, T. and Isma’il, F. (2010) Oil Prices and
Exchange Rate Volatility in Nigeria: An Empirical Investigation. Central Bank
of Nigeria Economic and Financial Review. Vol. 48/3 September, pp. 31-48.
Ogbu, O. (2012) Toward Inclusive Growth in Nigeria. The Brookings
Institution’s Global Economy and Development Policy Paper. No. 2012-03, June,
pp. 1-7.
United Nations Development Programme (2011) Human Development Reports.
New York: Palgrave Macmillan.
The World Bank (2012) World Bank Development Indicators. Washington D.C.