TITLE:               

FINANCIAL DEVELOPMENT AND MANUFACTURING SECTOR PERFORMANCE IN NIGERIA, (1986 – 2021)

AUTHORS:     

Ekwunife Faith Chinyere, J.U.J Onwumere, Dickson Ben Uche, Eke Chukwuma Nnate, Ejinkonye, Remigius Chinwoke

DOI:  10.5110/77. 1093               Page:   04-24            Vol: 19    Issue: 01   Year: 2024

ABSTRACT

This research investigates Financial Development and Manufacturing Sector Performance in Nigeria. The study used the Ex-post facto research design and annual time series from 1986 to 2021 which was sourced from Central Bank of Nigeria (CBN) Statistical Bulletin of various years and World development indicators. Principle component analysis were employed to construct index for the independent variables. The study employed Unit Root Test, the Error Correction Model (ECM) and ARDL Estimator were used in testing the hypotheses. The study used financial intermediation and financial liberalization measures to proxy financial development, while manufacturing sector growth (MOG) was used as the dependent variable. The study used deposit rate and prime lending rate as moderating measures.  The Results of the study revealed, Financial Liberalization explained -31% of changes that take place in manufacturing sector through exchange rate liquidity ratio and nominal interest rate with a t-test of  6.366 while Financial Intermediation explained 85%  of changes that take place in Manufacturing Sector in Nigeria (MOG) through total loan and advance, loan to deposit and private sector credit with a t-test of 6.8150.The variables also have positive significant effect on the dependent variable except financial liberalization that has negative significant effect on manufacturing sector output. The study, concludes that regulatory authorities should concentrate more on promoting good saving mind-set, increase quality and quantity of money supply in the economy, enhancement of exchange rate, improvement of private sector credit and create effective mobile payment system as this will lead to an improved manufacturing sector performance which will in turn lead to economic growth.

Keywords:

Financial Development, Manufacturing Sector, Financial Intermediation and Financial Liberalization.

Received: 13 December 2023

Accepted: 26 December 2023

Published: 04 January 2024