ASSESSING THE IMPACT OF MACROECONOMIC VARIABLES ON MANUFACTURING SECTOR IN WEST AFRICA REGION

Abstract

The West African manufacturing grew immediately after post-independence period, which was largely shaped by state-led and protectionist policies. The structural adjustment reforms of the state-owned enterprises and trade liberalization, along with foreign aid, restarted West African manufacturing in the 1990s. However, the increased competition from foreign products and pressures on its currencies, such as devaluations, made these gains to be short-lived. The study examined the macroeconomic variables and industrial output in West African region using cross session approach between 2008 and 2020. Contribution of industrial output to Gross Domestic Product (GDP), External Debt, Lending Rate and Inflationary Rate were used as variables. It was found that industrial output contribution to GDP estimate shows that there exist an inverse relationship between Industrial output and Lending Rate, Inflationary rate, while Industrial output and External Debt are positively related. It is recommended that a conducive macroeconomic policy should be operated to curb inflationary rate within the country so that raw materials for production would be cheap which will result to a continuous generation of output.