impact of manufacturing sector and exchange rate in nigeria

Topics: Inflation, Foreign exchange market, Bretton Woods system Pages: 66 (5070 words) Published: May 26, 2014

The impact of manufacturing sector on the economic growth and development of any country cannot be overemphasized. This is because of its capacity to generate employment opportunities for various growths in the economy. Foreign exchange earnings, improvement of the economic wellbeing of the entire population etc. however, the survival of the manufacturing sector depends largely on varieties of factor among which include the availability of informed and efficient managers of resources, skilled labor, and the government industrial policies availability of goo e.t.c However in a developing economy like Nigeria, the availability of capital goods is constrained by the low technological and base, which necessitates the dependencies on the developed countries of the world for the supply of capital goods. The demand for foreign capital goods therefore necessitates the demand for expatriates technician and spare parts for the maintenances of the equipment. That is why lows of foreign exchange earnings is spent annually in this purpose the volume of local currency spent on capital goods and expatriate works largely depends on the rate of exchange of the local currency to the currencies of the world it is worth mentioning that prior to the economic crises of 1981, the manufacturing sector had benefited from abundant foreign earnings of 1974 due to oil boon. The economic crisis of the early 1980’s by oil gut led to the decline in foreign exchange earnings and indirectly the decline in growth of manufacture sector in an attempt to revive the manufacturing sub sector of the economy, various policies have been adopted in the past among which are import substitution, industrialization policy, export promotion, government direct participation in manufacturing production and among others. Despite the various government policies on the manufacturing sector, an appreciable impact has not been felt. This is mainly due to the impact oriented nature of the economy and need for substantial amount of foreign exchange rate. This study therefore aim at examine the significance of exchange rate on the manufacturing sector with aim of proffering strategies necessary for the growth and development of the sector.

The Nigeria manufacturing sector is sick, the production sector is in a crisis as its average contribution to the natives forestic product over the past few years has not given beyond 5% many years of neglect and maladministration on the part of successive military and civilian governments, counted with corruption and indiscriminate policy reversal have all conspired to render the manufacturing sector comatose. Government after government have filed to pursue polices that could create a vibrant real sector with the impact of the manufacturing sector has steadily declined disappointingly low Firstly, I would examine the past and assess the journey so far in terms of what the country has done right or wrong via the various industrialization strategies put in place by successive Nigeria government. Send, I would examine where we are now and what specific contribution or draw back the Nigeria manufacturing sector had made toward national growth and development these past fifty-two years of post independent, thirdly, I would examine what prospect or dangers key ahead and what our aspirations are in the years before and beyond the sacred year of 2020 particularly in the manufacturing sector in particular. Lastly, I will examine strategies for addressing the problem and proffers appropriate solution and recommendation for achieving more resourceful and robust economy propelled by an alternative and vibrant manufacturing sector.

Generally, the paramount objective of the monetary authority one stimulation of output, employment, stable price and support external equilibrium. But these objectives have been...
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