The Impact of Monetary and Fiscal Policies On the Performance of the Industrial Sector in Nigeria: A Bounds Test Approach

Abstract

This study explicitly digs into the separated impact of fiscal and monetary policies as government stabilization policies on the Nigerian industrial sector performance as a real sector, from 1986-2021, using the ARDL Bounds Testing Approach. The data were filtered with use of Augmented Dickey Fuller unit root test while Johansen cointegration test was used to justify the long-run relationship among all included variables. Annual data were gathered from the Central Bank of Nigeria (CBN) Statistical Bulletin and World Bank Indicators (various issues). It was discovered that government stabilization policies are potent determinants on the industrial sector output in Nigeria both in the short-run and long-run. An appropriate monetary and fiscal policies mix and adjustments to match the dynamic nature of the economy would not only develop and sustain the Nigerian industrial sector but also enhance the living standard of the people.