scholarly journals Determinants and Sustainability of Manufacturing Sector Performance in Nigeria: The Roles of Selected Macroeconomic Variables

2021 ◽  
Vol 7 (2) ◽  
pp. 31
Author(s):  
Falade Abidemi Olufemi Olusegun
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Real Exchange Rate ◽  
Money Supply ◽  
Manufacturing Sector ◽  
Trade Openness ◽  
Exchange Rate Policy ◽  
Market Force ◽  
Tax Rate ◽  
Sector Performance

Manufacturing sector is a vibrant sector that spurs growth in every other sector of the economy. Despite this, macroeconomic environment in the country has not made this desire materialized. Therefore, the study examined the determinants and sustainability of manufacturing sector performance in Nigeria from 1994-2019. The data used include manufacturing sector output, interest rate, real exchange rate, tax rate, money supply and trade openness. Also, Error Correction Model (ECM) and Pairwise Granger Causality(PGC) techniques were used for the formulated objective. The unit root test confirmed stationarity of interest rate at level; while other were integrated of order one (D = 1). The Johansen co-integration established a long-run relationships. The ECM corrected the disequilibrium at an annual rate of 77.5%. Also, real exchange rate, tax rate and trade openness had a direct and significant effect on manufacturing sector output. While, interest rate and money supply were non-significance. The PGC result revealed a bi-directional causality between real exchange rate and manufacturing sector and tax rate and manufacturing sector output. It was concluded that increase in consumption tax, real exchange rate and liberation of the economy were the determinants of manufacturing sector performance, while appreciation of nigeria’s currency (naira) and increase in tax rate with proportional improvement in infrastructural facilities are needed to sustain it. Therefore, recommended that the financial institutions especially the apex bank should eliminate different bench-mark of exchange rate policy by allowing the market force of demand and supply to depict the real value of naira.

scholarly journals Macroeconomic Dynamics and the Manufacturing Output in Nigeria

2018 ◽  
Vol 9 (2) ◽  
pp. 43-54 ◽  
Author(s):  
Adegbemi Babatunde Onakoya
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Money Supply ◽  
Inflation Rate ◽  
Manufacturing Sector ◽  
Percent Level ◽  
Negative Relationship ◽  
Preliminary Evaluation ◽  
Macroeconomic Factors ◽  
The Impact

AbstractThis paper examined the impact of the changes in the macroeconomic factors on the output of the manufacturing sector in Nigeria from 1981 to 2015. Preliminary evaluation of the data was conducted using both descriptive statistics and stationarity evaluation. The test indicated that not all the variables are normal. The occurrence of order integration at first level difference necessitated the deployment of the Johansen cointegration test. The findings revealed no short run association among manufacturing output and each of GDP, exchange rate, broad money supply and unemployment rate. Negative relationship existed amongst inflation rate, interest rate, exchange rate, broad money supply on one hand, and manufacturing output. The inflation rate and interest rate, were statistically insignificant. However, significant and positive relationship existed between GDP of the previous year and unemployment on the one hand and manufacturing output on the other, at 5 percent level. The results showed that manufacturing was a veritable engine of economic growth. The post estimation tests showed presence of serial correlation but evidence of heteroscedasticity existed which, made the model inefficient, but its estimator is still unbiased. The study recommended the harmonization of both fiscal and monetary policies for the attainment of macroeconomic stability and avoidance of rapid policy summersaults.

scholarly journals THE INFLUENCE OF WORLD CPO PRICE ON REAL EXCHANGE RATE OF RUPIAH THROUGH THE CHANGES OF MONEY SUPPLY, INTEREST RATE AND INFLATION

2018 ◽  
Vol 2 (1) ◽  
pp. 111
Author(s):  
Rizky Amelia Zahrah Lubis ◽  
Dede Ruslan ◽  
Andri Zainal
Keyword(s):  
Regression Analysis ◽  
Exchange Rate ◽  
Data Analysis ◽  
Interest Rate ◽  
Real Exchange Rate ◽  
Money Supply ◽  
Quantitative Research ◽  
Analysis Model ◽  
Two Stage ◽  
Descriptive Method

AbstractThe aim of this research is to anaylse the influence of world CPO price on real exchange rate of Rupiah through the changes of money supply, interest rate, and inflation. This is a quantitative research employing eviews 6.0. This current research hasshown that the influence of world CPO price to real exchange rate of Rupiah through the changes of money supply, interest rate, and inflation in Indonesia between 2008(q1-q4) – 2015(q1-q4)) is significant and of positive value. Data analysis in this research wasemploying descriptive method, equipped with econometric data analysis with double linier regression analysis model applied by using regression. The simultanous equivalence was done by Two-Stage Square / 2 SLS) model.KeyWords: Real Exchange Rate of Rupiah, World CPO Price, Supply of Money, Interest Rate, Inflation

scholarly journals Effects of Foreign Exchange Crisis on the Performance of Manufacturing Sector in Nigeria

2021 ◽  
pp. 1-7
Author(s):  
Dr. Marshal Iwedi
Keyword(s):  
Foreign Direct Investment ◽  
Exchange Rate ◽  
Foreign Exchange ◽  
Direct Investment ◽  
Manufacturing Sector ◽  
Trade Openness ◽  
Exchange Rate Policy ◽  
Least Square ◽  
Explanatory Variables ◽  
Level Of Significance

The study examined the effect of foreign exchange crisis on the performance of manufacturing sector in Nigeria over the period of 35 years ranging from 1985 to 2019. The study proxy foreign exchange crisis by exchange rate of U.S to Nigeria, trade openness and foreign direct investment while performance of manufacturing sector was measured by manufacturing sector gross domestic product. Time series were used and sourced from central bank of Nigeria statistical bulletin for 2019. Ordinary least square (OLS) technique of regression was used to analyze the data. The R-square, T-statistics and F-statistics were used to determine the extents to which the explanatory variables affect the explained variable. The hypotheses formulated were tested at 5% level of significance using t-test. The results reveal that foreign exchange rate has a negative and significant effect on manufacturing sector GDP in Nigeria. Trade openness has a positive and significant effect on manufacturing sector performance while foreign direct investment has a positive and significant effect on manufacturing sector GDP in Nigeria. The study concluded that foreign exchange crisis plays a significant negative role in the performance of manufacturing sector in Nigeria. The study recommended that there should be pursuance of sustainable and stable exchange rate policy and to put in place, measures that will promote greater exchange rate stability.

scholarly journals External Sector and The Nigerian Manufacturing Sector Performance, 1981-2019

2022 ◽  
Vol 05 (01) ◽  
Author(s):  
Leera Kpagih ◽  
Keyword(s):  
Exchange Rate ◽  
Manufacturing Sector ◽  
Trade Openness ◽  
Environment Impact ◽  
Ardl Model ◽  
Long Run ◽  
Short Run ◽  
Sector Performance ◽  
External Sector ◽  
Exchange Rate Level

No country is an island. The globalization phenomenon is making all countries to be interdependent. The external sector environment has become critical for the success of every country and internal balance. Thus, it has become important to examine how much the externa sector environment impact on the performance of the domestic economy. The present study, therefore, examined the influence of Nigerian external sector environment on the performance of the Nigerian manufacturing sector between 1981 and 2019. The study adopted exp-post research design approach and the Autoregressive Distributed Lag (ARDL) model estimation techniques. The empirical model consists of the Nigerian manufacturing sector output index as the dependent variable and exchange rate, trade openness, and foreign direct investment as independent variables and external sector environment variables. Test of unit root results indicated that the variables have mix order of integration, while the co integration analysis results indicated that the variables in the model have stable long run relationship. Estimate of the ARDL model reveals that in the short run exchange rate variations have negative, but significant effect on manufacturing sector performance, while trade openness, and FDI have positive but insignificant influence on the manufacturing sector performance in the short run. In the long run, exchange rate level and FDI inflows have positive and significant effect on the manufacturing sector performance, while trade openness has negative and significant effect on the Nigerian manufacturing sector performance. The study therefore conclude that the Nigerian external sector Environment has significant influence on the performance of the Nigerian manufacturing sector.

scholarly journals THE IMPACT OF TRADE OPENNESS ON MANUFACTURING SECTOR PERFORMANCE

2021 ◽  
Vol 3 (Number 1) ◽  
pp. 12-22
Author(s):  
Sun Fu Neoh ◽  
Tian So Lai
Keyword(s):  
Exchange Rate ◽  
Manufacturing Sector ◽  
Trade Openness ◽  
Dynamic Effect ◽  
Percentage Change ◽  
Series Data ◽  
Lending Rate ◽  
Production Growth ◽  
Sector Performance ◽  
The Impact

Trade openness plays a vital role in boosting the production of the manufacturing sector. Two opposing perspectives identify trade-growth nexus. One posits that trade openness will stifle industrial productivity while the opposing view believes that manufacturing productivity can be enhanced by a trade liberalization regime. This study investigates the instantaneous and jointly dynamic effect of trade openness along with macroeconomic variables (i.e., Malaysian exchange rate and average lending rate) and the event of economic crises on manufacturing sector performance in Malaysia using data from 1981 to 2016. This study employed a distributed lag model. The Augmented Dickey-Fuller (ADF) unit root test was adopted to determine the stationarity of time series data. The empirical results revealed that the effect of both instantaneous and the jointly dynamic effect of the percentage change in trade openness on manufacturing production growth in Malaysia are positive and significant. However, the effects of the percentage change in exchange rate and percentage change in average lending rate are insignificant. Economic crisis has a significant negative impact on Malaysian manufacturing production growth. Therefore, the results strongly recommend that the direction of trade policy in Malaysia should be formulated based on outward-looking strategies.

scholarly journals ICT and its Impact on the Financial Development of the Banking System

2021 ◽  
pp. 8-14
Author(s):  
Arash Ketabforoush Badri
Keyword(s):  
Foreign Direct Investment ◽  
Exchange Rate ◽  
Foreign Exchange ◽  
Direct Investment ◽  
Manufacturing Sector ◽  
Trade Openness ◽  
Banking System ◽  
Exchange Rate Policy ◽  
Least Square ◽  
Explanatory Variables

The study examined the effect of foreign exchange crisis on the performance of manufacturing sector in Nigeria over the period of 35 years ranging from 1985 to 2019. The study proxy foreign exchange crisis by exchange rate of U.S to Nigeria, trade openness and foreign direct investment while performance of manufacturing sector was measured by manufacturing sector gross domestic product. Time series were used and sourced from central bank of Nigeria statistical bulletin for 2019. Ordinary least square (OLS) technique of regression was used to analyze the data. The R-square, T-statistics and F-statistics were used to determine the extents to which the explanatory variables affect the explained variable. The hypotheses formulated were tested at 5% level of significance using t-test. The results reveal that foreign exchange rate has a negative and significant effect on manufacturing sector GDP in Nigeria. Trade openness has a positive and significant effect on manufacturing sector performance while foreign direct investment has a positive and significant effect on manufacturing sector GDP in Nigeria. The study concluded that foreign exchange crisis plays a significant negative role in the performance of manufacturing sector in Nigeria. The study recommended that there should be pursuance of sustainable and stable exchange rate policy and to put in place, measures that will promote greater exchange rate stability.

scholarly journals The Effect of Monetary Policy on Foreign Trade in Nigeria

2020 ◽  
Vol 4 (1) ◽  
pp. 1-8
Author(s):  
Ashamu Sikiru O.
Keyword(s):  
Monetary Policy ◽  
Foreign Direct Investment ◽  
Exchange Rate ◽  
Interest Rate ◽  
Foreign Trade ◽  
Error Correction ◽  
Money Supply ◽  
Direct Investment ◽  
Trade Openness ◽  
The Impact

This research work investigated the impact of monetary policy on foreign trade in Nigeria during the period 1981 to 2017. The research made use of secondary data which are collected from the Central Bank of Nigeria, Statistical Bulletin (2017). The model obtained from the result represents a Error Correction Model (ECM) which relates the dependent variable (Net Import) to several predictor variables Money Supply, Interest Rate, Exchange Rate, Foreign Direct Investment and Trade Openness. From the findings of the study, the error correction term (speed of adjustment towards equilibrium) value of -0.53581 is significant at 5% and implies that there is a long run causality running from monetary policy   activities measures of foreign trade. However, only all the variable was used in the study was significant at 5% level of significance. This implies that monetary policy in Nigeria has a positive influence on foreign trade within the period, except for interest rate that has a negative coefficient and not significant. In conclusion, these intermediate variables of monetary, the exchange rate arguably have a huge impact on the economy because of its effect on the value of local currency, domestic inflation, macroeconomic credibility, capital flows and financial stability. Increased exchange rate directly affects the prices of imported commodities and an increase in the price of imported goods and services contributes directly to increase in inflation. Based on the analysis, the study concluded that there is significance relationship between money supply and net import in Nigeria and also that there is relationship between foreign direct investment and net import in Nigeria. The study also shows that there is relationship between trade openness and net import in Nigeria.

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