The Effect of Liberalization Policy on manufacturing Sector in Nigeria for the Period (1986-2018)

Abstract

The study aims to examine the impact of trade liberalization on manufacturing output in Nigeria. The objectives of the study are: to examine the impact of exchange rate, gross fixed capital and economic growth on manufacturing output. The study depends on following hypotheses: Exchange rate, Fixed Capital Formation and Economic growth dynamics has a significant impact on manufacturing output in Nigeria. The study used a Vector Auto Regression (VAR) model for the time series data during the period (1986-2018). The result also shows that, exchange rate, has significant and negative impact on manufacturing output; even though it was positive in the long run.  Furthermore, Gross Fixed Capital Formation and Economic have significant impact on manufacturing output in Nigeria. The study recommended that, the focus of government industrial policy should be to encourage trade openness. The exchange rate should be strengthened and made more stable the growth induced policies should be emanated, as that will go a long way to improve and increase the output of the manufacturing sector in Nigeria.