Manufacturing Sector and Economic Growth in Nigeria: Evidence from Auto Regressive Distributive Lag (ARDL)

The study examines the impact of manufacturing sector on economic growth in Nigeria using time series data from 1985 to 2022. Data was subjected to unit root tested using Augmented Dickey Fuller and Phillips Perron, the test showed that real gross domestic product, manufacturing output and agricultural output are stationery at first difference while exchange rate is stationery at level. From the Auto regressive Distributive Lag (ARDL) model result it indicated that in the short run, manufacturing output has positive but statistically insignificant impact on real gross domestic product, at lag 1 and 3 it is negative and statistically insignificant while lag 2 it is positive and statistically significant impact on real gross domestic product. it further revealed that agricultural output has negative and statistically insignificant impact on real gross domestic product in Nigeria, at lag 1 it is negative also but statistically significant impact on real gross domestic product in Nigeria. Exchange rate itself has positive but statistically insignificant impact on real gross domestic product, at lag 1 it is negative and statistically insignificant, at lag 2 it is negative but statistically significant while lag 3 it is positive and statistically significant on real gross domestic product in Nigeria. From the long run coefficient it found that manufacturing output has positive but statistically insignificant impact on real gross domestic product. Also, agricultural output has positive but statistically insignificant impact on real gross domestic product. Exchange rate has negative and statistically insignificant impact on real gross domestic product in Nigeria. The study recommended that government should make adequate foreign exchange available to manufacturers in order to acquire raw materials at cheaper cost for production.