Assessment of Nigeria’s Economic Sectors Through the Input-Output Model

Abstract

This study established the contribution effect of the input-output model in studying the interconnectedness of industries in Nigeria’s economy, with the aim of channelling resources and policy framework to building industries with strong backward and forward linkages that can spur and stimulate industrial growth. The data was sourced from the NBS database of production statistics, labour statistics, and foreign trade statistics, as well as administrative, enterprise, and household surveys. The entire productive sector was aggregated into thirteen sectors with similar features and according to international industrial standard classification. The table constructed shows that the coefficient values have changed over the years since the last review. There are indications of slight positive changes in innovation, technology, and business activities that have sprouted up over the years. Furthermore, there were no negative values in the entire production matrix. The results of the impact analysis show that electricity and water have a strong production linkage and their positive impacts cut across income, value-added, and with a relatively lower impact on job creation from direct, indirect, and induced effects. It is undeniably one of the economy's major driving sectors, while agriculture, lodging and food service, transportation and storage, professional, arts, administrative, and public sectors (labour-intensive sectors) are at the forefront of employment and income generation. The manufacturing industry contributes less to per capita income and employment. This is a signal that the nation is still lacking behind in terms of industrial development, which is the key or bedrock of development and employment generation in developed nations of the world.