Pages: (87-98 )
Abstract
In developing countries, the importance attached to the manufacturing sub-sector lies in the perceived close association that exists between manufacturing and growth in real per capita income. In this paper, manufacturing impact of oil price shock in Nigeria is explained over a thirty-three years’ sample period. The unstable crude oil price in the world and the domestic environment are responsible for the decline. The situation is a major concern to policy makers because it has the potential to slow down manufacturing activities and economic growth. The manufacturing sector is known to possess the attributes of economic prime mover. There is thus a compelling need to put appropriate policy measures in place to reposition the sector in this era of oil price slump and the global economy slowdown that is characterized by increasing competition in the manufacturing environment. Such measures may include liberalization of the sector, control of manufactured imports, reduction of corporate tax, and above all, the sustenance of political stability. These measures, in addition to the new policy framework the government has put in place, are expected to significantly boost the sector in the long-term and facilitate economic growth and development.
Keywords: Manufacturing output, Oil price shocks, Economic growth, OLS,