EuroEconomica, Vol 36, No 2 (2017)

Bank Credit and Growth of the Manufacturing Sector Nexus In Nigeria: An ARDL Approach

Michael Segun Ogunmuyiwa, Babatunde A Okuneye, Joseph N Amaefule




This paper examines the impact of bank credit on growth of the manufacturing sector in Nigeria.  Time series data from the return to democratic rule in 1999 to 2014 were fitted into the regression model. Econometric techniques particularly the Augmented Dickey-Fuller (ADF) test and the Autoregressive Distributed Lag (ARDL) were applied on the time series data. Empirical findings show that bank credit to the private sector has a positive impact on the manufacturing sector.  Based on the findings of this research work, the study recommends that there is need to develop the financial market to favour more credits to the private sector in other to stimulate economic growth. Albeit, a significant impact was found between bank credit and manufacturing output, the policy implication of this finding is that monetary policy instruments should still be targeted towards allocating more credits to the private sector with particular reference to the Micro, Small and Medium Enterprises (MSME’s) in order to fully achieve the desired objectives of boosting the output of the manufacturing sector as well as providing a lead way for the  attainment of the desired economic growth and development. 


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