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Effect of Industrial Sector on Economic Growth in Nigeria

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Description

– Effect of Industrial Sector on Economic Growth in Nigeria –

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Abstract

This study has investigated the effect of industrial sector on economic growth in Nigeria for a period of 37 years (1980 to 2016).

The study adopted a linear multiple regression model and the OLS estimation technique.

The study used GDP as the dependent variable while industrial sector, FDI, total savings and inflation were used as the explanatory variables.

From the results gotten, industrial output has a positive relationship with economic growth and it is statistically significant. FDI was revealed to have a positive relationship with the gross domestic product in Nigeria.

Thus, policies geared towards the attracting FDI, will have a positive effect on it and thereby resulting to an increase in the gross domestic product.

Introduction

1.1 Background of the Study

The impact of manufacturing on economic development has been widely studied. Very few countries have been able to grow and accumulate wealth without investing in their manufacturing industries, and a strong and thriving manufacturing sector usually precipitates industrialization.

The manufacturing sector is widely considered to be the ideal industry to drive Africa’s development. This is due to the labour-intensive, export- focused nature of the industry. There is a direct correlation between exportation levels and the economic success of a country.

By increasingly adding value to products before they are sold, revenues are boosted, thereby raising average earnings per input. Furthermore, the manufacturing sector is also more sustainable and less vulnerable to external shocks than commodities (KPMG, 2014).

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