Export Diversification Drive: The Role of Nigerian Manufacturing Sector

Abstract

This research delves into the enigmatic relationship between Nigeria’s manufacturing sector and the nation’s drive for export diversification. Leveraging a regression analysis and time series data from 1985 to 2022, it paints a nuanced picture of their complex interplay. The analysis confirms the stationarity of all variables at first differenced. Additionally, the Johansen co-integration test reveals a long-run equilibrium relationship between them, suggesting that while their short-term fluctuations may diverge, they are ultimately bound by a deeper interdependence. The analysis exposes a weak and negative association between the two, hinting at the meagre contribution of the manufacturing sector to export diversification during the studied period. This underscores the need for a critical reevaluation and targeted interventions to unlock the sector’s potential as a powerful engine of export growth. Therefore, the study advocates for a paradigm shift in approach. Instead of government’s piecemeal efforts, it should champion the creation of a robust and vibrant manufacturing ecosystem, pulsating with innovation and productivity. This vision will envision modern factories humming with cutting-edge processes, meticulously crafting highquality goods capable of holding their own on the global stage. From value-added agricultural products to sophisticated machinery, the potential portfolio of Nigerian exports is vast and brimming with promise.