2011
DOI: 10.5539/ibr.v5n1p157
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Factors Affecting Capacity Utilization Decisions in Nigeria: A Time Series Analysis

Abstract: This study examined the impact of some macroeconomic variables and power supply on the performance of the Nigerian manufacturing sector, using ex-post facto research design. Secondary data were sourced from Central Bank of Nigeria (CBN) statistical bulletin (2009) and other publications. The main findings of the study were that power supply had positive and significant impact on capacity utilization while inflation rate and interest rate had negative impact on capacity utilization. However, the impact of inter… Show more

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Cited by 8 publications
(9 citation statements)
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“…Our results show that the most serious issues faced by LMMIs, such as a shortage of power/electricity, shortages of raw materials and working capital, and government rules and regulations, significantly affected LMMIs not working at full capacity. This finding is consistent with Mojekwu & Iwuji (2012), who found that electricity supply has a significant positive impact on capacity utilization, and also that electricity and raw material shortages cause poor performance of infrastructural facilities, mainly due to frequent power cuts and the high cost of raw materials.…”
Section: Discussionsupporting
confidence: 91%
“…Our results show that the most serious issues faced by LMMIs, such as a shortage of power/electricity, shortages of raw materials and working capital, and government rules and regulations, significantly affected LMMIs not working at full capacity. This finding is consistent with Mojekwu & Iwuji (2012), who found that electricity supply has a significant positive impact on capacity utilization, and also that electricity and raw material shortages cause poor performance of infrastructural facilities, mainly due to frequent power cuts and the high cost of raw materials.…”
Section: Discussionsupporting
confidence: 91%
“…The manufacturing sector which is one of the key indices of growth and development in Nigeria, have suffered negligence over the years due to the overdependence of the Nigerian economy on the oil sector and the disregard of other sectors (agriculture, mining, energy and infrastructure) that boost manufacturing activities (Mojekwu, 2012). However, it also seems the operators of the sector have not taken into consideration the importance of efficient optimization strategies in the performance of their day to day supply chain activities, so as to improve on the responsiveness in the relationship with its customers.…”
Section: Introductionmentioning
confidence: 99%
“…This may be the case with the low capacity utilization in the pharmaceutical industry in spite of the fact that some products have been placed under import prohibition list, to encourage their local manufacture. Investment in infrastructure has a positive impact on manufacturing productivity, while inefficient investment in economic infrastructure (electricity and transport) has a negative effect on manufacturing productivity (Adenikinju and Olofin, 2000;Ukoha, 2000;Mojekwu and Iwuji, 2012). This indicates that government interventions must be all inclusive to realize high manufacturing activity in the pharmaceutical subsector.…”
Section: Discussionmentioning
confidence: 99%