ABSTRACT

This research work set out to investigate industrial sector growth and economic performance in Nigeria. The study employed multiple regression models and Granger causality model using secondary data from 1981 to 2015. Results show that the coefficient of crude petroleum and natural gas, solid mineral variables and manufacturing sub-sector growth are positive and statistically significant. From the Granger causality result, bidirectional causality does not exist between economic growth and industrial sector performance in Nigeria. However, there is a unidirectional causal relationship between industrial sector performance and economic growth at lag 4 and lag 6. However, there is no significant structural break in economic growth especially between military and democratic rules in Nigeria. Also, the Engle-Granger cointegration suggests that there is a long-run relationship. Also, the ECM result suggests that about 15% of the short-run disequilibrium in the model would be corrected in the next period. The study concludes that industrial sector growth is a significant factor affecting economic growth in Nigeria and recommends that industrial sector growth should be boosted by appropriate package of incentive to induce entrepreneurs and investors to undertake profitable investment particularly for export oriented industries.