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THE IMPACT OF INDUSTRIAL SECTOR ON ECONOMIC GROWTH OF NIGERIA

ABSTRACT

The industrial sector of every economy, developed or growing, remains a strong component. The developed world is known for its strong industrial performance. The impact of industrial activity on the economies of developing or undeveloped countries is widely debated. It is a reality that without industrial activities, the economy will not flourish. Agriculture, manufacturing, mining and mineral processing, and manufacturing export prospects are among these activities. The impact of industrialisation on economic development is the focus of this research. It asserts that, despite the efforts of the Nigerian government, the country’s growth remains stunted due to certain constraints. To address these issues, it was suggested that the government ensure policy consistency by allowing fiscal and monetary policies to work out before introducing a counter policy; additionally, industrial policy should be designed, reviewed, and implemented in such a way that it encourages rather than discourages investment in the sector. As a result of the foregoing, the nation’s prosperity is heavily reliant on the development and maintenance of the industrial sector.

CHAPTER ONE

INTRODUCTION

BACKGROUND OF THE STUDY

In most emerging economies, industrialization is seen as a primary goal of economic policy. They consider agriculture and industrialisation as essential components of development and structural transformation. Some economists believe that industries have a critical influence in a country’s economic growth and development. The purpose of this study is to examine the impact of the industrial sector on Nigeria’s economic development.

In general, the British industrial revolution, which occurred in the late 18th and early 19th centuries, played a significant role in the current setback in industrial development, resulting in the factory process, which evolved into industrial production. Thus

The contribution of the industrial sector to Nigeria’s economic prosperity is as old as the country itself, according to history. It dates back to 1914, when the southern parts of the country were merged to form Nigeria, a geographical land mass. Fr. Fredrick Lugard, a representative of the British colonial authority.

Nigeria’s government began using import substitution as an economic strategy as soon as independence was declared, in order to address the country’s trade imbalance and accelerate industrialization, among other things.

Rapid industrialisation was prioritized in Nigeria’s development objectives from the first national development plan (1962-1968) to the fourth national development plan (1981-1985).

During the third national development plan (1975-1980), for example, the government sector allocated 16.2% of the budget plan to the industrial sector, which was the highest. Adoption of an import substitution strategy, expansion of indigenous equity participation in foreign-owned enterprises, provision of industrial integration, linkages, and diversification, increased domestic resource content of industrial product, and provision of financial and manpower resources to promote research and adoption of technology to encourage small and medium-scale industries and public sector participation were among the industrial policies and strategies for development.

Nigeria began a structural adjustment program (SAP) in 1986 to deal with the sector’s and economy’s growing issues.

The second tier foreign exchange market (SFEM) was established in 1987 to allow market forces to determine the foreign currency rate, reduce price distortions, and so effect a more efficient allocation of resources, in the spirit of SAP.

Due to the failure of prior policies to meet expectations, the government introduced a new approach to industrial growth in 1988, emphasizing the role of the private sector. In August 1988, the government established the national committee on industrial development to give reality to this management paradigm (NCID). The necessity to create a network of sectors is predicted by the strategic management of industrial development (SMID) or industrial master plan (IMP) (referred to as strategic consultative groups)

 STATEMENT OF THE PROBLEM

In many economies, the industrial sector is recognized to be the backbone of value-added operations. If Nigeria wants to industrialize, it will have to deal with several issues that are impeding the process. For the purposes of this study, it is necessary to examine the issues that are posing barriers to industrialization.

The industrial sector has struggled with poor export price elasticity and a lack of comparative advantage. This means that, despite the multiple incentives provided to the industrial sector, Nigeria’s participation of the foreign exchange market cannot increase.

The lack of an indigenous entrepreneurship class, together with other multinational corporate issues, has an impact on the structure and type of scientific and technology labor usage for national growth.

OBJECTIVES OF THE STUDY

Despite the presence of manufacturing industries in Nigeria’s economy, it has been observed that the majority of industries have not achieved their economic development goals. As a result, the following goals are investigated in this work.

i. To determine the manufacturing industry’s contribution to Nigeria’s economic development.

ii. To look into how Nigeria’s industrial sector may be made to contribute more to the country’s economic growth through increasing productivity.

HYPOTHESIS OF THE STUDY

This study investigates the following hypotheses:

H0: The contribution of the industrial sector to Nigeria’s economic development is negligible.

Hi: The contribution of the industrial sector to Nigeria’s economic development is enormous.

  SIGNIFICANCE OF THE STUDY

The importance of this research rests in the fact that it will reveal the amount to which industrialization has aided Nigeria’s economic development. It will highlight some of the roadblocks to Nigeria’s increased industrialization and industrial output.

Entrepreneurs and government officials will benefit from this study since it will point them in the right direction for starting an industrial development strategy. The importance of this research also stems from the fact that it adds to the body of knowledge on industrial production that already exists.

In addition, this research will benefit students of economics, government, and real-world industrialists, investors, and other related courses.

Other researchers will recognize this work as valuable research material in their discipline.

Finally, because knowledge is never wasted, readers of this work will be interested to learn that high industrialization is the quickest path to economic development.

SCOPE OF THE STUDY

The impact of industrialization on Nigeria’s economic development is the subject of this study. The date utilized is secondary data acquired from the central bank of Nigeria’s statistical bulletin and the amial report of accounts. The t-test and regression analysis were used in this study as analytical methods.

LIMITATIONS OF THE STUDY

A study of this sort is bound to encounter some difficulties, and as a result, it was hampered by a number of variables, including:

TIME: While conducting this in-depth research, the researcher was also attending classes, preparing for exams, and engaging in other activities, as well as doing household chores. As a result, the researcher did not have enough time to polish his study.

FINANCE: This project’s main constraint was its financial deficiency. As a student, the researcher was financially reliant. This research required a lot of resources, trips, and logistics, which were not sufficiently provided.

DATA: The contentious nature of the Nigeria data caused this project to be postponed. The researcher spent a significant amount of time harmonizing the data used in this study.

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