UNIZIK JOURNAL OF BUSINESS 1(1) 2018 DOI: 10.36108/unizikjb/8102.10.0140
DOMESTIC MACROECONOMIC DRIVERS OF INDUSTRIALIZATION IN NIGERIA: STATUS AND PROSPECTS FROM THE MANUFACTURING SUB-SECTOR
*Ebele Stella Nwokoye, Clement Izuchukwu Igbanugo & Stephen Kelechi Dimnwobi
Department of Economics, Nnamdi Azikiwe University Awka
While most advanced economies are in the process of de-industrializing their economies, efforts by successive governments to transform the economy of Nigeria, from a commodity-driven to an industrialized one, has not yielded much fruit despite several industrial policies and reforms. In Nigeria, the problem of industrialization is not the difficulty in attaining economic growth but the predicament of the extent to which attention is paid to infrastructure, human capital, private sector credit, technology, foreign direct investment, domestic price and exchange flexibility as determinants of the manufacturing sub-sector’s utilization capacity rate and its productivity index. Based on the United Nations/World Bank success yardsticks with theoretical framework rooted in the Prebisch-Singer Hypothesis and the endogenous growth model, this study utilizes the K-class estimation procedure on Nigeria’s time series between 1990 and 2016. The result obtained indicate that infrastructural development, appropriate moderate institutional frameworks, bank credit, foreign direct investment, electricity, a stable exchange rate, low inflation and economic diversification are key drivers of industrialization. The findings also confirm that unless the Nigerian economy achieves improved infrastructure delivery and institutional framework as well as stable domestic and currency prices, the efforts towards economic diversification may be counterproductive. It is therefore expedient that Nigeria focuses on building strong macroeconomic fundamentals that would accentuate its take-off to industrialization.
Keywords: diversification, gross domestic product, industrialization, macroeconomy, manufacturing,