FINANCIAL DEVELOPMENT AND THE PERFORMANCE OF THE INDUSTRIAL SECTOR IN NIGERIA (1986 – 2020)

Abstract

The study determined how credit to private sector, market capitalization, broad money supply and savings explained and affected the variation in industrial sector contribution to real gross domestic product, index of industrial production, manufacturing capacity utilization, and foreign direct investment. The Auto-Regressive Distributive Lag (ARDL) estimation technique was applied in estimating the models using data from 1986 to 2020. The study revealed that credit to private sector, market capitalization, broad money supply and savings significantly explained and affected the variation in industrial sector contribution to real gross domestic product, index of industrial production, manufacturing capacity utilization, and foreign direct investment. There is the need for the development of the requisite infrastructure i.e. provision of infrastructural facilities like power, water etc. can be a potential to sustain a low interest rate regime through its positive impact on the cost of doing business.