The Influence of Macroeconomic Variables on Manufacturing Sectors: A Case of Nigeria

Abstract

This study has examined the influence of macroeconomic variables on manufacturing sectors with a particular reference to Nigerian economy. The objective of the study is to investigate the effects of macroeconomic variables on manufacturing sectors (proxy businesses, productivity sectors and industries) in Nigeria. Econometrics tools were employed to analyse the variables sourced from the Central Bank of Nigeria Statistical bulletin within the period of 1985 up to 2022. Among the pre-test conducted on the variables are unit root test, descriptive statistics and co-integration bound test. Meanwhile, post-diagnosis test conducted include: stability test, heteroskedacity test, and serial correlation test. The findings show that macroeconomic variables have mixed influences on the manufacturing sector in Nigeria. It is, therefore, recommended that the government should effectively stabilise and manage interest rate, exchange rate and inflation rate with a view of creating enabling environment for manufacturing firms and potential investors in Nigeria. The government should intensify the efforts of garnering more foreign earnings by harnessing international trades.