International Journal of Academic Research in Business and Social Sciences

search-icon

Monetary Policy and the Performance of the Manufacturing Sector in Nigeria (1986-2017)

Open access
This study examined the effect of monetary policy on the performance of the Manufacturing sector in Nigeria. The explanatory variables are monetary policy rate, Treasury bills rate, Cash reserve requirement and money supply; while the dependent variable is the Manufacturing (MANU) sector output. The study adopted an ex-post facto research design and used secondary data obtained from the CBN Statistical Bulletin. The study covered a period of 32 years (1986 to 2017). The data were subjected to Augmented Dicker Fuller stationarity test to determine the best suitable econometric tool of analyses. The Autoregressive Distributive Lag (ARDL) was used for the model estimation. The results indicate that: monetary policy tools have significant effect on the manufacturing sector output in Nigeria in the short run only. The study thus concludes that monetary policy tools may not be a long run policy instrument for the growth of the manufacturing sector output in Nigeria but rather short run instruments. This study recommended that money supply and treasury bills can be used in the short run as policy instruments to maintain macroeconomic stability in Nigeria with reference to the manufacturing sector.
Amassoma, D., Nwosa, P. I. & Olaiya (2011). An appraisal of monetary policy and its effect on macroeconomic stabilization in Nigeria. Journal of Emerging Trends in Economics and Management Sciences, 2(3), 232-237.
Bakare-Aremu, T. A. & Osobase, A. O. (2015). Effect of Fiscal and Monetary Policies on Industrial Sector Performance- Evidence from Nigeria. Journal of Economics and Sustainable Development, 6(17), 61 – 81.
CBN (2017). CBN Statistical Bulletin, (online copy). Vol. 28 December 2017. Retrieved on 15 August, 2018, from: Shttp://www.cenbank.org/OUT/2018/PUBLICATIONS/STATISTICALBULLETINS/2017/INDEX.HTML
CBN (2018). Monetary Policy Instruments used by the CBN. Educational. Retrieved fromhttps://www.cbn.gov.ng/Out/EduSeries/Monetary%20Policy%20Instruments%20used%20by%20the%20CBN.pdf.
Charles-Anyaogu, N. B. (2012). Investigating the performance of monetary policy on manufacturing sector in Nigeria. Arabian Journal of Business and Management Review, 2(1), 12-25.
Ezeaku, H. C., Ibe, I. G., Ugwuanyi, U. B., Modebe, N. J. & Agbaeze, E. K. (2018). Monetary policy transmission and industrial sector growth: Empirical evidence from Nigeria. SAGE Open, April-June, 1–12.
Geiger, M. (2008). Instruments of monetary policy in china and their effectiveness: 1994–2006. Discussion Papers No. 187. United Nations Conferences on Trade and Development.
Gujarati, D. N. (2003). Basic Economics. New York: TafaMeGrew Hill Companies.
Harris, R. and Sollis, R. (2003), “Applied Time Series Modelling and Forecasting”, West Sussex: Wiley.
Igbinedion, S. O. & Ogbeide, F. (2016). Monetary policy and manufacturing capacity utilization: Further evidence from Nigeria. South-Eastern Europe Journal of Economics, 2, 159–174.
Imoisi A. I, Olatunji L. M. & Ekpenyong, B. I (2013). Monetary policy and its implications for balance of payments stability in Nigeria: 1980-2010. International Journal of Economics and Finance, 5 (3), 196-204
Imoughele, L. E. & Ismaila, M. (2015). Monetary Policy and Balance of Payments Stability in Nigeria. International Journal of Academic Research in Public Policy and Governance, 2(1), 1 – 14.
Okonkwo, O. N., Egbulonu, K. G. & Emerenini, F. M. (2015). Monetary policy and the manufacturing sector in Nigeria. SSRG International Journal of Economics and Management Studies, 2(1), 11 – 19.
Omini, E. E, Ogbeba, E.P, & Okoi, O. (2017). Monetary policy shocks and industrial output in Nigeria. British Journal of Economics, Management & Trade Article no. BJT.30459, 16 (2), 1–13.
Omotor, D. G. (2007). Monetary policy and economic growth: Theoretical and conceptual issues, CBN Economic and Financial Review, 45(4), 39-67.
Onakoya, A. B., Ogundajo, G. O. & Babatunde, S. J. (2017). Monetary policy and the sustainability of the manufacturing sector in Nigeria. Review of Innovation and Competitiveness, 3(4), 71 – 88.
Owolabi, A. U & Adegbite, T. A. (2014). Impact of monetary policy on industrial growth in Nigeria.International Journal of Academic Research in Business and Social Sciences, 4(1), 18 – 31.
Perkins, D.H., Radelet, S., & Lindauer, D.L. (2006). Economics of development, London: W.W. Norton and Company Ltd.
Pesaran, M. H. & Shin, Y. (1999). “An Autoregressive Distributed Lag Modeling Approach to Cointegration Analysis”, in Storm, S. (Ed), “Econometrics and Economic Theory in the 20th Century”, The Ragnar Frish Centennial Symposium, Cambridge University Press.
Pesaran, M. H., Shin, Y. & Smith, R. J. (2001). Bound testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 16: 289-326.
Srithilat, K. & Sun, G. (2017). The impact of monetary policy on economic development: Evidence from Lao PDR. Global Journal of Human Social Science,XVII(II-1),8-1
In-Text Citation: (Osakwe, Ibenta, & Ezeabasili, 2019)
To Cite this Article: Osakwe, A. ., Ibenta, S. N. ., & Ezeabasili, V. N. (2019). Monetary Policy and the Performance of the Manufacturing Sector in Nigeria (1986-2017). International Journal of Academic Research in Business and Socal Sciences, 9(2), 399–413.