Volume 9, Number 2

Impact of Fiscal Policy on Manufacturing Sector Growth Performance in Nigeria

  Authors

Abiola Olawale M., Research and Economic policy Division, Nigeria

  Abstract

This research delves into the correlation between Nigeria's manufacturing sector and Government Capital Expenditure. Employing regression analysis, we leverage time series data spanning 1981 to 2022 to shed light on this dynamic relationship. The study affirms the stationarity of all variables after first differencing. Furthermore, the Johansen co-integration test unveils a long-run equilibrium relationship among the selected variables, namely Value of Manufacturing output, Government Capital Expenditure, Value Added Tax, and Customs and Excise Duty. The analysis uncovers a robust and positive connection between the growth performance of the manufacturing sector and Government Capital Expenditure throughout the examined timeframe. The findings indicate that increased Government Capital Expenditure correlates with enhanced growth in the manufacturing sector output. This study underscores the critical role of public investment in fostering economic growth and industrial development. The results suggest that strategic allocation of resources towards infrastructure, regulatory frameworks, and supportive policies can significantly impact the vibrancy and competitiveness of Nigeria's manufacturing sector.

  Keywords

Manufacturing sector, Capital Expenditure, Value Added Tax, Customs and Excise duty, Co-integration