IMPORT DEPENDENCE, VALUE ADDED AND EMPLOYMENT IN THE NIGERIAN MANUFACTURING SECTOR

Abstract

This study undertakes the impact of import dependence and manufacturing sector performance in Nigeria with specific interest on the impact of imported intermediate, capital, and manufactured goods (herein referred to as import dependence) on manufacturing sector performancec indicators (such as manufacturing output growth, capacity utilization, value added, employment rate and export adopted in the study) from 1970 to 2019 utilizing a secondary data. The study adopted Augmented Dicky-Fuller (ADF) for unit root test analysis, Autoregressive Distributed Lag (ARDL) bounds test for cointegration test analysis, while, Error Correction Mechanism (ECM) was used to provide empirical evidence for the relationship between manufacturing sector performance (dependenct variable) and import dependence (independent variable). The ARDL bounds cointegration test revealed evidence of long-run relationship between manufacturing sector performance and import dependence. It was discovered from the empirical findings among others that only import of capital contributed positively to all indicators of manufacturing sector performance adopted in the study, however, import of intermdiate goods was mixed in the sense that, it contributed negatively to manufacturing average capacity utilization (MACU), manufacturing value added (MVAD), manuafcturing export (MEXP) and contributed positively to manufacturing output (MOUP) and manufacturing employment rate (MEMP). But, import of manufactured goods contributed negatively to all indicators of manufacturing sector performance adopted in the study. Based on the findings, the study recommends that government should sell off compromise of all forms and make import only for capital and partially for intermediate goods that cannot be produced domestically, while, the importation of manufacutured goods should be discouraged at all cost in Nigeria. Thus conclude that on the average Nigeria’s manufacturing sector is surrounded with doubting benefits and may not be good enough to set economic growth and developmental platform required in the economy.