Trend analysis of the performance of Nigeria’s Manufacturing Sector, 1960-2010

Abstract

This paper examined the performance of the Nigerian manufacturing sector for fifty years (1960-2010) using such performance indices as manufacturing sector real GDP, percentage contribution to the Gross Domestic Product, index of manufacturing production, and percentage average manufacturing capacity utilization within this period. The major finding was that despite many policies and developmental initiatives undertaken by successive civilian and military administrations since independence, the Nigerian manufacturing sector has grossly underperformed in relation to its potential due to several daunting challenges facing the sector. The data analysis revealed the unimpressive state of the manufacturing sector over the years, its low percentage contribution to GDP, as well as the effect of the fluctuating average manufacturing capacity utilization on the growth rate and productivity of the sector. The study recommended that the key to reversing the poor performance of Nigerian manufacturing is an increase in adequate capacity utilization to boost local manufacturing and export.

Critical Junctures and Merchandize Exports of Nigeria

“…According to Obansa [19], SAP was designed to pay more attention to exports, especially in the agricultural sector which witnessed the worst neglect before its introduction. Umofia [20] maintains that the objectives of SAP were to introduce locally manufactured products to international markets through increased output and was envisaged to help increase government earnings and provide employment both in industry and agricultural sectors. Ikpeze, [21] assert that before the introduction of the SAP, government policy encouraged public ownership of heavy industries through protection and subsidies.…”

“…In Nigeria, import substitution industrialization was adopted in the First Development Plan (1962-68) and consolidated in the second plan (1970-74) period but eventually collapsed due to the importdependent structure of the economy. Stabilization measures were introduced with restrictive monetary policy and stringent exchange control measures in 1984 with negative economic impact on the industrial sector that necessitated the introduction of SAP with a view to introduce locally manufactured products to international markets to strengthen export-based industrialization [20].…”