Industrial Sector and Economic Growth Nexus in Nigeria: An Empirical Analysis (1981-2024)

Abstract

This work examined effect of the industrial sector on Nigerian economy. Statement of problem: The industrial sector’s contribution to GDP in Nigeria was 39.64% in 1981 and 35.16% in 1982 which have declined to 31.87% in 2021 and 31.24% in 2022. Nigeria is still regarded as industrially underdeveloped despite her various development plans and strategies. There’s human, natural resources and investment opportunities in abundance but the desired targets are yet to be achieved possibly due to wrong and inconsistent policies as well as inadequate techno-managerial capacity and ability to drive this sector. Specific objectives: To ascertain the effect of mining & quarrying; manufacturing; electricity, gas and steam; water supply, sewage & waste management and construction on gross domestic product in Nigeria. Methodology: The theoretical foundation of this investigation lies in the endogenous growth theory. The ex-post facto research design was adopted. The data from 1981 to 2024 was obtained from CBN statistical bulletin and analyzed using OLS technique. The specific objectives were to assess the effect of: mining & quarrying on GDP; manufacturing on GDP; electricity on GDP; water supply on GDP and construction on GDP. Findings: (1) MINQUA had a positive (2.856364) and significant effect (0.0000) on GDP; (2) MANFAC had a positive (11.42379) and significant effect (0.0000) on GDP; (3) ELGASA had positive (3.615652) but non-significant effect (0.8590) on GDP; (4) WSSEWM had a positive (180.4526) and significant effect (0.0088) on GDP; (5) CONSTR had a negative (-14.6166) but significant effect (0.0000) on GDP. (5) The probability (f-statistic) and adjusted R2 values were 0.000000 and 99.31% respectively. Recommendations: (1) Government and players in the industrial sector should keep on improving on policies and strategies with which to continue to achieve significant effect on MINQUA, MANFAC, WSSEWM and CONSTR, while they should fine-tune strategies on ELGASA to reverse its non-significant effect.