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Manufacturing sector performance in Africa: The role of monetary policy instruments


  • Akinyemi, Kayode

    (Department of Economics, University of Lagos, Nigeria.)

  • Ogbuji, Isaac

    (Department of Finance, University of Lagos, Nigeria.)

  • Adedokun, Sunday

    (Department of Economics, University of Lagos, Lagos, Nigeria.)


This scientific enquiry investigates the effect of monetary policy instruments on manufacturing performance in twenty African countries over the period of 1997-2016. We use static panel analysis and the results show that liquidity ratio and money supply positively and significantly impact manufacturing output. Lending rate negatively but significantly affects manufacturing output which also conforms to a priori expectation. The positive and significant effect of exchange rate on manufacturing output indicates that the higher the exchange rate the higher the manufacturing output. The study also finds that interest rate negatively impacts manufacturing output. Hence, African countries should endeavor to strengthen their monetary authorities and be dynamic in their monetary policy to effectively control supply of money and reduce lending rate.

Suggested Citation

  • Akinyemi, Kayode & Ogbuji, Isaac & Adedokun, Sunday, 2018. "Manufacturing sector performance in Africa: The role of monetary policy instruments," BizEcons Quarterly, Strides Educational Foundation, vol. 3, pages 27-35.
  • Handle: RePEc:ris:buecqu:0006

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    More about this item


    Monetary Policy; Manufacturing Output; Money Supply; Lending Rate;
    All these keywords.

    JEL classification:

    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • N67 - Economic History - - Manufacturing and Construction - - - Africa; Oceania


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