Relative Impact Of Financial Sector Reforms On Agricultural And Manufacturing Sector Growth In Nigeria

Relative Impact Of Financial Sector Reforms On Agricultural And Manufacturing Sector Growth In Nigeria

Abstract

The study investigates relative impact of fiscal sector reforms on agrarian and manufacturing sector growth in Nigeria. To guide the study, Ordinary Least Forecourt fashion was espoused and Eviews8.0 econometric software was employed for the analysis. A time series daily data sourced from Central Bank of Nigeria Statistical Bulletin 2009 and 2013and it covered the period 1970- 2013 was used for the analysis. After carrying out necessary pre- and post individual test, the result shows that gross fixed capital conformation and credit to private sector rate to GDP has positive but insignificant relationship with agrarian and manufacturing sector affair. While real interest rate, manufacturing capacity application and fiscal sector reform dummy were positive and significant, interest rate spread, real exchange, average periodic downfall and plutocrat force rate to GDP displayed negative relationship with agrarian and manufacturing sector affair. Upon comparison of impact of crucial fiscal indictors on agrarian and manufacturing sector affair, the result revealed that impact of real interest rate and fiscal sector profitability indicator( SINR) in the pre- andpost-financial sector reform were significant in each sector. In discrepancy, while impact of real exchange rate doesn’t significantly impact agrarian sector affair, it latterly came significant in the model for manufacturing sector affair. The study still concludes that domestic investment on structure and credit installation to the sectors wassub-optimal. Secondly, actors in the sectors were made worse- off by the reform. expansive review of being programs, provision of impulses, accessible and affordable backing was recommended by the study.

Chapter One

Preface

Background to the Study

The fiscal sector is central to any frugality of the world, and the ripples of the sector’s downturn are generally felt in all other sectors of the frugality. Lin, Sun, and Jiang( 2009) suggested that the structure of the fiscal sector reveals the nature of the productive conditioning in similar frugality. It’s thus not surprising that Nigeria like utmost developing husbandry, has espoused colorful forms of policy and institutional reforms since independence to insure that the sector remains in good health. The success story isn’t the same far and wide however, while some countries have been successful in barring underpinning deformations and restructuring their fiscal sectors in the morning of the new renaissance, in some cases fiscal sectors remains underdeveloped( Dileep, Rambabu, & Bhisma, 2007). fiscal sector reforms, especially a comprehensive one, would be a reversal approach to manage up with the pitfalls of global competitiveness in carrying out the fiscal services. The country has witnessed a surge of reform in the fiscal sector. It’s material to point out at this juncture that fiscal sector is comprised of banks andnon-bank fiscal institutions( plutocrat and capital requests) along with other fiscal system that supports them.

As the fiscal reform marvels advances, so do the understandings of it advance. fiscal reform as Gencalo( 2011) puts it “ is a multifaceted miracle ”. According to Ebong( 2006), they’re deliberate policy response to correct perceived or impending fiscal heads and posterior failure. In other words, the different interventions of the civil government through the central bank of Nigeria and other fiscal institutions controllers to enable the fiscal sector and the frugality recover from factual or impending disaster is what’s then appertained to as fiscal reform. On the prospects on fiscal reforms, Edirisuriya( 2008) reported that fiscal sector reforms are anticipated to promote a more effective allocation of coffers and insure that fiscal intermediation occurs as efficiently as possible. By recrimination, fiscal sector reforms brings competition in the fiscal requests, raises interest rate to encourage savings, thereby making finances available for investment, and hence lead to profitable growth( Asamoah, 2008).