Economic Growth; the Quest for performance of the manufacturing sector in Nigeria

The work explores how performance in the manufacturing sector can affect the economic growth in Nigeria between 1986 and 2024. The relationships that the study investigates that specifically are the ones between the economic growth and the manufacturing service sector, textile manufacturing sub-sector, credit to the private sector and the exchange rate. The research design is an ex-post facto research design that makes use of secondary time series data obtained through the Central Bank of Nigeria, National Bureau of Statistics and the World Bank. The econometric methodology of cointegration used was Autoregressive Distributed Lag (ARDL) bounds testing methodology, which was selected due to its ability to serve the purpose of data of a mixture of the non- stationary and stationary variable. The major results show that there is a constant long-run correlation between the variables and economic growth. However, unlike, predictability, the textile manufacturing industry presents a big negative but negative long term effect on the growth of the economy, and this indicates structural inefficiency in the sub-sector. The textile production affects it positively in the short run, however, which signals that it can revive. The manufacturing service sector shows a significant negative short-run impact, highlighting immediate operational challenges like infrastructure deficits. The effects of credit on the manufacturing sector are mixed and distributed across several lags, while exchange rate changes demonstrate a complex, multi-period influence. The study concludes that while the Nigerian manufacturing sector holds significant promise for economic growth, its potential is constrained by infrastructural bottlenecks, inefficient credit allocation, and exchange rate volatility. The findings necessitate targeted policy interventions focused on modernizing the textile industry, improving the business environment for manufacturing services, ensuring efficient credit flow to productive sectors, and maintaining exchange rate stability to harness the manufacturing sector’s full capacity as an engine of sustainable economic growth in Nigeria.