International Journal of Research and Innovation in Social Science (IJRISS) |Volume VI, Issue XII, December 2022|ISSN 2454-6186
Manufacturing Sector and Import Dependence in Nigeria
Unegbu Paul Ikechukwu1, Prof. Uche Collins Nwogwugwu2, Ebere, S. Nwokoye (Ph.D)2, Amaka, G. Metu (Ph.D)2, Obisike, Ndubueze Ezindu (Ph.D)3
1School of Business Education, Federal College of Education (Technical), Umunze, Anambra State, Nigeria.
2Nnamdi AzikiweUniversity Akwa Anambra State, Nigeria
3Rhema University Aba Abia State, Nigeria.
Abstract: This study uses secondary data to examine the relationship between the manufacturing sector and import dependence in Nigeria, paying particular attention to the effects of imported intermediate, capital, and manufactured goods (herein referred to as import dependence) on the performance indicators of the manufacturing sector (such as manufacturing output growth, capacity utilization, value added, employment rate, and export adopted in the study). Error Correction Mechanism (ECM) was used to provide empirical evidence for the relationship between manufacturing sector performance (dependent variable) and import dependence. The study adopted Augmented Dicky-Fuller (ADF) for unit root test analysis, Autoregressive Distributed Lag (ARDL) bounds test for cointegration test analysis, and (independent variable). Evidence of a long-term association between the performance of the manufacturing sector was found by the ARDL bounds cointegration test.It was discovered from the empirical findings among others that only import of capital contributed positively to all indicators of manufacturing sector performance adopted in the study. Based on the findings, the study recommends that government should adopt import substitution strategy and make import only for capital and partially for intermediate goods that cannot be produced domestically, while, the importation of manufacutured goods should be discouraged at all cost in Nigeria. Thus conclude that on the average Nigeria’s manufacturing sector is surrounded with doubting benefits and may not be good enough to set economic growth and developmental platform required in the economy.
Keywords: Economic Growth, Import dependence, Manufacturing Sector
I. INTRODUCTION
1.1 Background to the Study
Raw materials can be transformed or converted from one state to another during the manufacturing process (Ndebbio&Ekpo, 1991). It consists of components used in the physical or chemical synthesis of new products from raw materials, substances, or component parts (International Standard Industrial Classification). Nigeria’s manufacturing industry is made up of major, medium-sized, small, and micro firms (CBN, 2013). Performance of the manufacturing sector is a broad term, but it entails thinking about or looking at the growth, success, or failure rate of some performance indicators. Manufacturing output growth, average capacity utilization, manufacturing value added, manufacturing employment rate (MEMP), and manufacturing exports are