MACROECONOMIC VARIABLES AND PRODUCTIVITY OF NIGERIA’S MANUFACTURING SECTOR

ANOCHIE, Uzoma C.
Department of Economics
College of Management Sciences
Michael Okpara University of Agriculture, Umudike
uzomaanochie@gmail.com
OKEREAFOR, Geff
Department of Marketing
College of Management Sciences
Michael Okpara University of Agriculture, Umudike
okereaforgeff@mouau.edu.ng
BASHIR, Muyiwa Ogungbangbe
Department of Marketing
College of Management Sciences
Michael Okpara University of Agriculture, Umudike
rite2bash@gmail.com
ABSTRACT
This study examined the effect of macroeconomic variables (exchange rate, interest rate and inflation
rate) on productivity of Nigeria’s manufacturing sector. Three research hypotheses were formulated to
guide the study. The used study used secondary data collected from annual time series from 1980-2020
obtained from the Central Bank of Nigeria (CBN) Statistical Bulletin. The ordinary least squares,
cointegration and regression statistics were used to analyse the data. The study found that exchange rate
and interest rate has significant effect on the productivity of Nigeria’s manufacturing sector; and that
inflation rate has no significant effect on the productivity of Nigeria’s manufacturing sector. The study
thus concluded that exchange rate and interest rate are macroeconomic variables that significantly affects
productivity of Nigeria’s manufacturing sector; and recommends that exchange rate and interest rate
should be stabilized in other to maintain steady growth and positive performance of manufacturing firms
in Nigeria.
Keywords: Exchange rate, inflation rate, interest rate, manufacturing sector, productivity