Abstract
This study examined the effect of monetary policy on the performance of the Manufacturing sector in Nigeria. The explanatory variables are monetary policy rate, Treasury bills rate, Cash reserve requirement and money supply; while the dependent variable is the Manufacturing (MANU) sector output. The study adopted an ex-post facto research design and used secondary data obtained from the CBN Statistical Bulletin. The study covered a period of 32 years (1986 to 2017). The data were subjected to Augmented Dicker Fuller stationarity test to determine the best suitable econometric tool of analyses. The Autoregressive Distributive Lag (ARDL) was used for the model estimation. The results indicate that: monetary policy tools have significant effect on the manufacturing sector output in Nigeria in the short run only. The study thus concludes that monetary policy tools may not be a long run policy instrument for the growth of the manufacturing sector output in Nigeria but rather short run instruments. This study recommended that money supply and treasury bills can be used in the short run as policy instruments to maintain macroeconomic stability in Nigeria with reference to the manufacturing sector.
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