Interest rate volatility and Nigeria’s manufacturing sector performance
No Thumbnail Available
Date
2017
Authors
Odeleye, A.T.
Sangodele, T.H.
Journal Title
Journal ISSN
Volume Title
Publisher
The Academia: An International Journal on Research and Development
Abstract
The manufacturing sector in Nigeria is faced with several economic challenges among which interest rate volatility takes a pole position. This study focuses on determining the effect of interest rate fluctuation on Nigeria’s manufacturing sector performance between 1980 and 2016. Its theoretical footing is the neo-classical or the loan-able fund theory, as it employs the Vector Error Correction framework to analyse the various data sourced from the World Development Indicators. The stationarity test confirmed that all the data were stationary at levels. Empirical results confirmed that interest rate has negative impact on manufacturing value added and manufacturing capacity utilisation in Nigeria. It was also observed that a long run relationship exists between interest rate fluctuation and manufacturing sector performance in Nigeria. It was therefore recommended that the regulatory authorities should strive to maximize this opportunity to design appropriate long term policies that can enhance industrial expansion through the appropriate interest rate regime rather than putting in place short term measures that are not sustainable to industrial development.
Description
Scholarly article
Keywords
Citation
Odeleye, A.T., & Sangodele, T.H. (2017). Interest rate volatility and Nigeria’s manufacturing sector performance. The Academia: An International Journal on Research and Development, 4(2), 133-146.