DETERMINANTS OF BUSINESS PERFORMANCE IN NIGERIA MANUFACTURING SECTOR

This study investigates the determinants of business performance in Nigeria's manufacturing sector through an aggregated analysis using Ordinary Least Squares (OLS) regression. The analysis utilized annual time series data spanning from 1999 to 2023, sourced from the Central Bank of Nigeria (CBN) statistical bulletin and the National Bureau of Statistics (NBS). Prior to the regression analysis, unit root and co-integration tests were conducted to ensure data robustness. The findings reveal that financial intermediation (FIN) significantly enhances manufacturing output, with a coefficient of 37.12, while market size (MATZ) also presents a strong positive influence with a coefficient of 20.41. Conversely, exchange rates (EXCH) negatively impact manufacturing performance, exhibiting a coefficient of -7.34, and interest rates (INTR) demonstrate an adverse effect of -12.98. Infrastructure (INFRA) and inflation (INFL) were found not to be statistically significant in this context. The model's R-squared value of 0.78 indicates that approximately 77.82% of the variation in manufacturing output can be explained by the independent variables, affirming the model's validity. Based on these results, the study recommends that policymakers enhance financial intermediation services and promote market expansion strategies, while also addressing exchange rate volatility to improve the manufacturing sector's performance. These steps are crucial for fostering a more resilient and competitive manufacturing environment in Nigeria, thereby driving economic growth.