The Manufacturing Sector of Ghana: Are There Any Macroeconomic Disturbances?

INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS), 2024

This study has examined the influence of macroeconomic variables on manufacturing sectors with a particular reference to Nigerian economy. The objective of the study is to investigate the effects of macroeconomic variables on manufacturing sectors (proxy businesses, productivity sectors and industries) in Nigeria. Econometrics tools were employed to analyse the variables sourced from the Central Bank of Nigeria Statistical bulletin within the period of 1985 up to 2022. Among the pre-test conducted on the variables are unit root test, descriptive statistics and co-integration bound test. Meanwhile, post-diagnosis test conducted include: stability test, heteroskedacity test, and serial correlation test. The findings show that macroeconomic variables have mixed influences on the manufacturing sector in Nigeria. It is, therefore, recommended that the government should effectively stabilise and manage interest rate, exchange rate and inflation rate with a view of creating enabling environment for manufacturing firms and potential investors in Nigeria. The government should intensify the efforts of garnering more foreign earnings by harnessing international trades.

Journal of Physics: Conference Series, 2019

The paper attempted to examine the impact of manufacturing sector output on economic growth in Nigeria from 1981 to 2016. The study employed secondary data sourced from the Central Bank of Nigeria statistical bulletin for Autoregressive Distributed Lag (ARDL) model and the Granger causality techniques on RGDP, manufacturing capacity utilization (MCU), manufacturing output (LMO), government investment expenditure (GINVEXP), money supply (LM2) and interest rate (INR). Evidence of long-run and short-run relationships among the variables was established. The results showed that MCU has positive influence on RGDP while LMO also affects RGDP positively. It also showed that GINVEXP has negative effects on RGDP whereas LM2 influenced RGDP positively. Moreover, the result indicated a unidirectional causality between RGDP and MCU, LMO and LM2. Based on the above, the study suggest government should intensify efforts to promote socio-economic infrastructural, macroeconomic and institutional fr...

RePEc: Research Papers in Economics, 1998

The removal of high levels of protection combined with substantial real devaluations has changed the environment in which Ghanaian manufacturing firms have operated in the 1990s. The changes in output, composition and productivity, which have occurred over this period, are examined in this paper. Survey evidence for the growth of the sector is shown to be consistent with data from sales tax returns. Analysis of the panel survey shows that, in a comparative context, the rate of job creation in Ghana's manufacturing sector is high. This rate is highest in medium sized firms; small firms have not grown more rapidly than larger firms. There has been no underlying growth in technical efficiency and output growth has been matched by a commensurate growth in labour and capital inputs. Labour productivity differs substantially by firm size due primarily to differences in physical, not human, capital endowments.

This study examined the impact of manufacturing sector on Gross Domestic Product in Nigeria. In line with the objectives of the study, secondary data were obtained from Central Bank of Nigeria Statistical Bulletin database covering the period of 1989 to 2014. The total government expenditure, manufacturing output, investment and money supply were used to capture the causal relationship between GDP and the manufacturing sector in Nigeria, the impact of the manufacturing sector in Nigeria’s GDP as well as the opportunities, challenges and risks of manufacturing sector and its implication for sustainable development in Nigeria. The study employs Ordinary Least Square Regression (OLS) model for this purpose. Findings showed that the results of the study significantly support the theoretical expectation that when Nigeria manufacturing sector interacts more with other sectors, it raises the general production level and hence, manufacturing output. This implies that a positive relationship exists between the manufacturing sector of Nigeria and investment and money supply. The study recommends that the Nigerian government should ensure continuous openness of its economy in a beneficial way and as well put up measures to stem up the confidence of investors in the activities of the manufacturing output. Also, it should ensure that the rate of investment and money supply are steady in a manner that would encourage people to involve in the activities of the manufacturing sector.

Applied Finance and Accounting, 2021

Manufacturing sector is a vibrant sector that spurs growth in every other sector of the economy. Despite this, macroeconomic environment in the country has not made this desire materialized. Therefore, the study examined the determinants and sustainability of manufacturing sector performance in Nigeria from 1994-2019. The data used include manufacturing sector output, interest rate, real exchange rate, tax rate, money supply and trade openness. Also, Error Correction Model (ECM) and Pairwise Granger Causality(PGC) techniques were used for the formulated objective. The unit root test confirmed stationarity of interest rate at level; while other were integrated of order one (D = 1). The Johansen co-integration established a long-run relationships. The ECM corrected the disequilibrium at an annual rate of 77.5%. Also, real exchange rate, tax rate and trade openness had a direct and significant effect on manufacturing sector output. While, interest rate and money supply were non-signifi...

Issues in Economics and Business, 2016

This study examined the effect of exchange rate variability on manufacturing sector performance in Ghana. Using time series data from the period 1986-2013 and employing the autoregressive distributed lag (ARDL) approach, the empirical results show that there exists both a short as well as long run relationship between exchange rate and manufacturing sector performance. Thus, in Ghana as the exchange rate appreciates, the manufacturing sector performance improves and as it depreciates, the sector is adversely affected. In view of this, it is recommended that policy should be put in place to regulate the importation of goods that could be locally produced so as to improve the performance of the manufacturing sector. In addition, the government should ensure that there is regular electricity supply, good roads, water and a reliable telecommunication system so that the manufacturing sector can perform effectively and efficiently in order to achieve a considerable rate of economic growth.

Over time, the absence of locally sourced inputs has resulted in low industrialization. This is as a result of the near total neglect of agriculture which has denied many manufacturers their primary source of raw materials. Some constrains faced in this sector among others include; high interest rates, low patronage, unpredictable government policy. The paper thus, empirically examines the role of manufacturing sector in gearing economic growth in Nigeria from 1986-2014. Time series experimental research was adopted. Unit root test was carried out to test the stationarity levels of the variables before conducting the regression analysis to avoid spurious regression results. The co-integration results showed that long-run equilibrium relationship exist among the variables used for the analysis at 5% level of significance. The findings revealed that variations in demand are a significant driving force for variations in capacity utilization. The findings further showed that a percentage change in manufacturing output on average increases GDP by 0.04%. Suggestive from the analysis therefore is that there is need for provision of incentives for productive diversification through information externalities and coordination externalities. Also, there should be promotion of regionally integrated value chains and markets to enhance investment in manufacturing and other sectors to enhance industrial competitiveness and regional economic transformation.

Abstract Using annual time series data for Ghana, the current study investigates the effect of inflation on manufacturing sector productivity for the period 1968-2013. The empirical verification is done by using the Johansen test(JT), the Vector Error Correction Model (VECM), and the Ordinary Least Squares (OLS)regression test. The results indicate significant stable long run relationship between inflation and manufacturing sector productivity. However, there is insignificant short run link between inflation and manufacturing sector productivity in the VECM. The results of the OLS test indicate negative significant link between inflation and manufacturing sector productivity. The findings suggest that inflation has led to a decrease in manufacturing sector productivity. Policy makers should manage inflation very well in order to improve manufacturing sector productivity. Future study should examine the current topic accounting for causality and structural breaks issues since the present study did not consider these issues. Jel Codes: L60,E31, P24 Keywords: Manufacturing sector productivity, Inflation, Long run, Short run

The manufacturing sector is seen as major catalyst to development due to the ripple effect of industrial growth on every part of a country's economy. However, the structure of the manufacturing sector in developing economies like Nigeria has undermined its ability to make meaningful contribution to industrial development. This has shrouded the understanding of factors propelling growth in the manufacturing sector. This study examines the determinants of manufacturing sector growth in Nigeria from 1980-2018 with the aid of dynamic ordinary least square (DOLS) method of econometric analysis which has the potential to generate reliable estimates than the static OLS. In particular, DOLS accounts for endogeneity problem by adding leads and lags. Results of the study indicate that the main determinants of Nigeria's manufacturing growth are foreign direct investment (FDI), interest rate, labour force, inflation and exchange rate. We therefore recommend a robust regulation of foreign capital importation and local content policies to stem capital flight and spur manufacturing growth in the country. Also, the interest rate regime should be made to favour domestic capital utilization. This should involve laying emphasis on single-digit interest rate in order to lower the cost of production and boost activities in the manufacturing sector. JEL Classification Codes: F63, L20, L25, L60, O10, O14

Volume 3 of 1, January , 2022

The aim of this study is to investigate the relationship between Nigerian’s manufacturing industry and economic growth for their relative improvement through factors that affect economic growth which include financial accessibility, human capital development, government policy/ implementation and infrastructural development. The statistical significant relationship between manufacturing and financial accessibility human capital development, government policy/implementation and infrastructural development are 0.031, 0.04, 0.022 and 0.012 respectively. Comparatively, the p-value obtained from the relationship between manufacturing and infrastructural development indicates stronger evidence in favour of the alternative hypothesis than other factors affecting economic growth. This study focuses on the Nigerian labour-intensive manufacturing sector and the units of analysis are manufacturing leather, wood, and metal products. To effectively investigate this relationship, quantitative research approach and survey research strategy are used. The data collected from the research were analyzed statistically with IBM SPSS Statistics Version 21. The results obtained show that statistically there is significant relationship between manufacturing and economic growth. Keywords: Assessment, Manufacturing industry, Relationship, Factors, Economic growth.

The effects of exchange rate variations on the Ghanaian manufacturing sector is examined in this research using Nestle Ghana Limited as a case study. The idea is that fluctuations in the exchange rate have a negative impact on the industrial sector's production. This is due to Ghana's manufacturing industry's reliance on imported inputs and capital goods. The empirical research method was applied in this study. In this study, the regression econometric technique was used. The study focused on the Nestle Ghana population. This study's data came from a secondary source. The data for this study came from library research, the Nestle Ghana website's financial statements, and information from the Bank of Ghana, Ghana Statistical Service, and the Ministry of Finance. According to the findings, the exchange rate has a substantial impact on the economic growth of Ghanaian manufacturing enterprises, as well as the impact of exchange rate fluctuations on the manufacturing sector. Based on the findings, policy recommendations were offered. Among other things, there is a need to strengthen the link between agricultural and manufacturing by procuring raw materials locally and lowering the sector's dependency on imported inputs to a manageable level.

2009

This paper presents a comparison of the 1987 and 2003 censuses of manufacturing firms in Ghana. The study shows that the number of firms increased from 8,000 in 1987 to 26,000 in 2003. However, the increases were predominantly amongst small-sized firms which more than tripled, and medium-sized firms that doubled. Large firms remained about the same in number but firms employing 500 persons and more actually contracted from 52 to 40. With regards to wage levels in the manufacturing sector, the findings from the two censuses indicate that wages in large firms, thus those employing more than 100, more than doubled for all categories of workers between 1987 and 2003. Average wage per employee per month in large firms rose from US$53 in 1987 to US$139 in 2003. For medium sized firms, those employing from 10 to 100 employees, the increase was much less, from US$38 in 1987 to US$56 in 2003, a 47 per cent increase. There were very substantial increases in labour productivity measured both b...

International Journal of Research and Innovation in Social Science (IJRISS), 2024

This paper examines the linkage between the manufacturing sector and other sectors of the Nigerian economy using Rasmussen method with the help of the Leontief inverse matrix. The National Bureau of Statistics (NBS) and the CBN Statistical Bulletin for 2011 provided the input-output transaction table of all sectors, which served as the source of data for the study. The constructed input-output (I-O) table gives a simple and logical arrangement of all economic activity within an economy. The result of this study shows that the manufacturing sector has a strong forward and backward linkage with other sectors of the Nigerian economy. The findings suggest that the Nigerian government should prioritize policies that promote growth in the manufacturing sector, as it will improve better living standard for all individuals in the sector and all others connected to the manufacturing sector. This can be done by providing tax breaks and other incentives to manufacturing firms, and by investing in infrastructure and education. The government should also focus on developing policies that promote the development of industries that produce intermediate goods and services, as these industries are important for the growth of the manufacturing sector as a whole also the manufacturing enterprises should be encouraged to employ domestic inputs.

This paper examines the performance of the Nigerian manufacturing sector since independence in 1960 using such performance indices as percentage contribution to the Gross Domestic Product, index of manufactured products, percentage growth rate, manufacturing value added, employment growth rate, and percentage of capacity utilization within this period. Secondary sources like the Central Bank of Nigeria Statistical Bulletin, Annual Reports and Statements of Accounts as well as the Statistical Facts sheets of the National Bureau of Statistics and other publications were used in collecting the data. The main finding is that despite many policies and developmental initiatives undertaken by successive civilian and military administrations since independence, the Nigerian manufacturing sector has grossly underperformed in relation to its potentials. Daunting challenges facing the sector include unfavourable business environment, erratic power supply, poor and decaying physical infrastructures, multiple taxations, obsolete technology, high interest rates and inconsistency in government policies. The paper concludes by making recommendations for achieving a verile manufacturing sector.