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Another Side of the Coin: Exchange Rate Movements and the Manufacturing Sector in Nigeria

Author

Listed:
  • Anthony Orji
  • Jonathan E. Ogbuabor
  • Chiamaka Okeke
  • Onyinye I. Anthony-Orji

Abstract

This study estimated the impact of exchange rate (EXCH) movements on the manufacturing sector in Nigeria over the period 1981–2016. Time series data and ordinary least square (OLS) estimation technique were employed in this study to address the specified objective. The variables analysed were EXCH, manufacturing GDP (MGDP), government capital expenditure, foreign direct investment (FDI), credit to private sector and value of imports. From the result, it is apparent that EXCH movements play a significant role in the manufacturing sector’s performance in Nigeria. Specifically, the findings showed that EXCH, government capital expenditure (GCEXP), imports and FDI were positively related to MGDP, while credit to private sector was negatively related. Among others, the study recommends that the apex bank keep a closer watch on EXCH developments in order to keep formulating up-to-date policies that will ultimately enhance EXCH stability. This will largely contribute to the development of the manufacturing sector in the short and long run. JEL Classification: D51, F31, Q24

Suggested Citation

  • Anthony Orji & Jonathan E. Ogbuabor & Chiamaka Okeke & Onyinye I. Anthony-Orji, 2018. "Another Side of the Coin: Exchange Rate Movements and the Manufacturing Sector in Nigeria," Journal of Infrastructure Development, India Development Foundation, vol. 10(1-2), pages 63-79, June.
    • Handle: RePEc:sae:jouinf:v:10:y:2018:i:1-2:p:63-79
    DOI: 10.1177/0974930618811499
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    References listed on IDEAS

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    1. Frenkel, Jacob A, 1976. " A Monetary Approach to the Exchange Rate: Doctrinal Aspects and Empirical Evidence," Scandinavian Journal of Economics, Wiley Blackwell, vol. 78(2), pages 200-224.
    2. Abdallah Abdul-Mumuni, 2016. "Exchange Rate Variability and Manufacturing Sector Performance in Ghana: Evidence from Cointegration Analysis," Issues in Economics and Business, Macrothink Institute, vol. 2(1), pages 1-14, June.
    3. Olorunfemi Sola & Tomola M Obamuyi & Felix O Adekunjo & E.O Ogunleye, 2013. "Manufacturing Performance in Nigeria: Implication for Sustainable Development," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 3(9), pages 1195-1213.
    4. William H. Branson & James P. Love, 1988. "The Real Exchange Rate, Employment, and Output in Manufacturing in the U.S. and Japan," NBER Working Papers 2491, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Ekundayo Peter Mesagan & Kolawole Kushimo & Dominic Ikoh Umar, 2021. "Do fluctuations in exchange rate hinder non-oil export? An analysis of agriculture and manufacturing in Nigeria," SN Business & Economics, Springer, vol. 1(11), pages 1-23, November.
    2. Doki, Naomi Onyeje & Shitile, Tersoo Shimonkabir & Sule, Abubakar, 2021. "Imported Intermediate Inputs and Manufactured Exports in Nigeria: The Role of Dual Exchange Rate Regime," African Journal of Economic Review, African Journal of Economic Review, vol. 9(1), January.

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    More about this item

    Keywords

    Exchange rate; manufacturing sector; Nigeria;
    All these keywords.

    JEL classification:

    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land

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