INDUSTRIALIZATION AND JOB CREATION: EMPIRICAL EVIDENCE FROM NIGERIA

A country’s industrial sector undoubtedly contributes to job creation. Over the years, Nigeria has been experiencing high and rising levels of unemployment despite several efforts by successive governments to revamp the industrial sector. This study examined the role of industrialization in job creation in Nigeria. Specifically, the study investigated the impact of manufacturing sub-sector output, mining and quarrying sub-sector output, utility sub-sector output, construction sub-sector output, and labour force on unemployment rate in Nigeria. Labour force was introduced as a control variable. Annual time-series data from 1981 to 2023 were used for the study. The data were obtained from the Central Bank of Nigeria annual statistical bulletin for 2023, the Central Bank of Nigeria annual reports and statements of accounts (various years), and the World Bank development indicators (various years). The Johansen cointegration test, error correction mechanism, and Granger causality test were used to estimate the data. The estimated regression results revealed that manufacturing sub-sector and construction sub-sector outputs insignificantly reduce unemployment while mining and quarrying sub-sector output, utility sub-sector output, and labour force insignificantly aggravate unemployment. The Granger causality test indicated unidirectional causalities from unemployment rate to utility sub-sector output and from unemployment rate to labour force. The study concludes that industrialization does not make any significant contribution to job creation in Nigeria. Based on the findings, the study recommends that there should be a general improvement in the country’s macroeconomic environment and the provision of necessary infrastructural facilities so as to improve the performance of the industrial sector in terms of its contribution to job creation