IMPACT OF INDUSTRIAL OUTPUT AND

EMPLOYMENT ON ECONOMIC GROWTH IN

NIGERIA 1970 – 2012

A RESEARCH PROJECT

BY

ADUNG, JULIUS ADIE

MATRIC NO: 11/101143001

SUBMITTED TO

PROF. NDEM AYARA NDIYO

DEPARTMENT OF ECONOMICS
FACULTY OF SOCIAL SCIENCES
UNIVERSITY OF CALABAR
CALABAR – NIGERIA

IN PARTIAL FULFILMENT OF THE COURSE

REQUIREMENT: ECS (3402) RESEARCH METHOD

APRIL 2014
 ii

CERTIFICATION

I certify that this research project was carried out by

Adung, Julius Adie (Matric No: 11/101143001) of the

Department of Economics, University of Calabar, under my

supervision.

_____________________ ____________
Prof. Ndem Ayara Date
(Project supervisor)
Department of Economics
University of Calabar
Calabar
 iii

DEDICATION

This research work is dedicated to the Almighty God for

his guidance and grace.

 iv

ACKNOWLEDGEMENT

I wish to express my profound gratitude to the almighty

god for His love and grace that saw me through my stay in the

University. My special thanks goes to my project supervisor

Prof. Ndem Ayara for his immense contribution, support and

advice. I also wish to acknowledge the contributions of lecturers

of the department of economics for impacting me academically.

I am exceedingly grateful to my parents, Mr and Mrs.

Adung Fidelis, my brothers and sisters for their support

financially, morally, spiritually and academically.

Also to my friends and family on campus peace, Godwin,

Eteng, Ekama and the entire house of SCM Unical, I love you

all.

My heartfelt gratitude also goes to my uncle Mr. Ashipu

Joseph and family for their care and support during my stay in

the university may God bless you all.

 v

ABSTRACT

This study attempts to examine the impact of industrial output

and employments on economics growth in Nigeria. Time series

data for the period 1970 – 2012 was used; the ordinary least

squares (OLS) regression technique was also used as the

estimation method. The contributions of the various sub-sectors

of the industry to real gross domestic product was analyzed.

Results obtained showed that manufacturing subsector,

electricity subsector and mining subsector had significant

impact on real gross domestic product during the reviewed

period. Studies suggest extension of credit facilities through

financial institutions to small scale industries, local sourcing of

inputs, improved power supply as means of ensuring both

industrial and economic development.

 vi

TABLE OF CONTENTS

CERTIFICATION - - - - - - - ii
DEDICATION - - - - - - - iii
ACKNOWLEDGEMENT - - - - - iv
ABSTRACT - - - - - - - v
TABLE OF CONTENTS - - - - - vi
CHAPTER ONE: INTRODUCTION
1.1 STATEMENT OF THE PROBLEM - - - 3
1.2 OBJECTIVE OF THE STUDY - - - 4
1.3 OPERATIONAL HYPOTHESIS - - - 5
1.4 RESEARCH METHODOLOGY - - - 7
1.5 SCOPE AND LIMITATIONS OF THE STUDY - 8
1.6 SIGNIFICANCE OF THE STUDY - - - 8
1.7 ORGANISAITON OF THE STUDY - - - 9
1.8 OVERVIEW OF THE NIGERIAN
INDUSTRIAL SECTOR - - - - 10
1.9 DEFINITION OF TERMS - - - - 12

CHAPTER TWO: LITERATURE REVIEW AND

THEORETICAL FRAMEWORK
2.0 INTRODUCTION - - - - - - 14
2.1 LITERATURE REVIEW - - - - 14
2.2 COMPONENTS OF ECONOMIC
GROWTH AND DEVELOPMENT - - - 18
2.3 THEORETICAL FRAMEWORK - - - 21
2.3.1 COBB-DOUGLAS (C-D) NEOCLASSICAL
PRODUCTION FUNCITON - - - 21
2.3.2 THE ROMER MODEL - - - - - 24
2.3.3 THE HARROD - DOMAR GROWTH MODEL - 26
2.3.4 THE SOLOW NEOCLASSICAL
GROWTH MODEL - - - - - 27
 vii

2.4 OVERVIEW OF NIGERIAN

INDUSTRIALIZATION EXPERIENCE - - 29
2.4.1 THE PRE-INDEPENDENCE ERA (1947 -1959)- 29
2.4.2 THE POST -INDEPENDENCE ERA (1962-1969)- 31
2.4.3 THE OIL - BOOM ERA (1970-1980) - - 32
2.4.4 THE IMMEDIATE PRE-SAP ERA (1981-1986)- 34
2.4.5 THE POST SAP ERA (MID 1986 TILL DATE) - 35
2.5 FACTORS AFFECTING INDUSTRIAL
DEVELOPMENT - - - - - 36

CHAPTER THREE: RESEARCH METHODOLOGY

3.1 SOURCE OF DATA - - - - - 38
3.2 MODEL SPECIFICATION - - - - 39
3.3 METHOD OF ESTIMATION AND VALIDATION- 41
3.3.1 ECONOMIC "APRIORI" CRITERIA - - 42
3.3.2 STATISTICAL CRITERIA - - - - 42
3.3.3 ECONOMETRIC CRITERIA - - - - 45

CHPATER FOUR: DATA PRESENTATION, ANALYSIS

AND DISCUSSION OF FINDINGS
4.1 MODEL SPECIFICATION - - - - 47
4.2 PRESENTATION OF RESULT - - - 49
4.3 ANALYSIS OF RESULT - - - - 51
4.4 TEST OF HYPOTHESIS - - - - 59
4.5 ECONOMIC IMPLICAITON OF RESULT - 63

CHAPTER FIVE: SUMAMRY, RECOMMENDATIONS

AND CONCLUSION
5.1 SUMAMRY OF MAJOR FINDINGS - - 64
5.2 POLICY RECOMMENDATIONS - - - 65
5.3 CONCLUSION - - - - - - 67
REFERENCES - - - - - - 68
APPENDIX - - - - - - - 71
 1

CHAPTER ONE

1.0 Introduction

The development of any nation is critical to economic

survival and vibrancy of that nation. Development crisis

affection Africa as al whole and Nigeria in particular is often

anchored on poor industrial development and lack of

technological infrastructure. Technological infrastructure is a

vital prerequisite for economic, industrial and technological

growth and development. It comprises power supply, energy,

transportation, communication, water supply, etc. Most of which

are lacking in Nigeria. According to World Bank (1991),

industrial development and high technological infrastructure

drives productivity. Also according to Herrick and Kindle Berger

(1984), growth in per capita income induced by growing

productivity is the engine of development.

Nigeria contemporary economic history and socio political

evolution since independence provides on essential backdrop

to the pervasive manifestation of the features of her

 2

underdevelopment. Since 1963, revenue from crude oil sale

has deduced political integrity, destroyed the agricultural and

non-oil economic base and funded a succession of governance

that has remained woefully out of touch with the people. The

period ranging from 1965 to early 1999 witnessed a succession

of military regimes. This brought with it the destruction of the

civil service and public institutions, the withholding of public

goods and services, unprecedented inflation, the deterioration

of the agricultural sector as well as the manufacturing sub-

sector and indeed living standard and growing poverty.

The relatively high growth in industrial output in the 1970s

was traceable to the promotions of industries through high trade

barriers and incentives which offered protection and concession

to the “infant industries”. However, in the early 1980s, when

Nigeria’s economic crises deepened, the plight of the industrial

sector became more apparent. This is clearly shown by the

large negative growth of industrial output in 1985 till about

1995. Subsequently years brought about fluctuations in the

 3

growth of industrial output. Based on this research, the

contributions of the industrial sector to economic development

in Nigeria will be critically examined.

1.1 Statement of the problem

Rapid growth and development cannot be achieved for

any country that gives no serious attention to industrial

development. However there are various challenges facing the

Nigerian economy in terms of its development. One of the

greatest problems facing the Nigerian economy is the problem

of capacity utilization in the industrial sector, especially the

manufacturing sub-sector.

The industrial sector is facing challenges such as low and

declining contribution to the national output, declining and

negative real growth rates, dominance of only light assembly

types of consumer goods manufacture, low value-added

production due to high import dependence for inputs,

accumulation of large inventories of unsold finished product,

 4

dominance of substandard goods which cannot compete

internationally. This has led to loss of competitiveness, high

production cost, failure to utilize to advantage the strength of

labour intensive indigenous manufacturers coupled with outright

neglect of manufactured exports inspite of the incentives

provided by the government.

Despite these challenges, the industrial sector is still in

operation and as such the achievement of industrial

development by the Nigeria government will translate into the

development of the economy as a whole. It is on this note that

we decide to investigate the contributions of the industrial

sector to economic development in Nigeria.

1.2 Objective of the study

The general objective of this study is to examine the

impact of industrial sector contributions to economic

development of the Nigerian economy.

The specific objectives are;

 5

i. To examine the problems associated with industrial

sector development in Nigeria.

ii. To determine how to improve on the contributions of

the Nigerian industrial sector to the development of the

economy.

1.3 Operational hypothesis

The general proposition of this research work is that the

industrial sector has a significant impact on the Nigerian

economy. Specifically, it is hypothesized that;

Hypothesis I

Ho = b1: Industrial sector does not make a significant

contribution to total output (RGDP).

H1 = b1: Industrial sector makes a significant

contribution to total output (RGDP).

Hypothesis II

Ho = b1: Manufacturing sub-sector does not make a

significant contribution to total output.

 6

H1 = b1: Manufacturing sub-sector makes a significant

contribution to total output.

Hypothesis III

Ho = b1: Mining sub-sector does not make a significant

contribution to total output.

H1 = b1: Mining sub-sector makes a significant

contribution to total output.

Hypothesis IV

Ho = b1: Electricity sub-sector does not make a

significant contribution to total output.

H1 = b1: Electricity sub-sector makes a significant

contribution to total output.

Hypothesis V

Ho = b1: Building/construction sub-sector does not

make a significant contribution to total output.

H1 = b1: Building/construction sub-sector makes a

significant contribution to total output.

Hypothesis VI
 7

Ho = b1: Water does not make a significant contribution

to total output.

H1 = b1: Water makes a significant contribution to total

output.

1.4 Research methodology

This refers to the methodological approach to the study. It

comprises of sources of data, model specification and method

of estimation and validation. This research work utilizes

secondary data. We propose the empirical model which has

real gross domestic product (RGDP) as a measure of economic

productivity being the dependent variable while output in the

manufacturing sub-sector, mining sub-sector, building and

construction, electricity and water sub-sectors constitute the

independent variables. The ordinary least squares (OLS)

method of estimation and validation procedure would be used

as it satisfies the Gausss-Markov theorem of multiple

regression technique.
 8

1.5 Scope and limitation of the study

This study spans between 1980 and 2011. This

comprises of the immediate pre-sap era (1981-1986) and the

post structural adjustment (Post-SAP) era of 1986 till date when

industrialization was targeted. This study however was limited

by time, money and source of data. The time frame for this

research work was not enough to make a comprehensive study

of the subject. Also lack of adequate finance was a major

constraint. The paucity of data in the Nigerian public institutions

renders data not to be very reliable. Also being a secondary

data source, it poses, limitations still due to its inherent

inaccuracy.

1.6 Significance of the study

The result and findings of this study will help to evaluate

the role of the industrial sector in economic growth and

development. It will assist policy makers to articulate better

policies that will guide industrial sector development.

 9

Also corporate organizations, individuals and government

will be in a better position to evaluate and respond to various

policies which are believed to help in the adequate utilization of

the scarce resources at their disposal.

1.7 Organization of the study

The research work is divided into five chapters, chapter

one is the introductory part of the study, chapter two contains

the literature review and theoretical framework. Also economic

and institutional framework of industrial sector development

process in Nigeria is examined.

Chapter three deals with research methodology under

which we will look at model specification, method of estimation

and validation of results. Chapter four highlights the data

presentation and analysis of result while chapter five is devoted

to the summary of major findings, policy implication and

recommendations, and the conclusion of the study is also

provided here.
 10

1.8 Overview of the Nigerian industrial sector

The industrial sector is one of the major sectors of the

Nigerian economy. The industrial sector as a whole is made up

of 5 sectors which are the manufacturing, mining building and

construction, electricity/energy, water and gas sector (vide

World Bank Development report, 1985). In government

classification, the industry is divided in three sectors which are

the primary sector comprising agricultural activities as whole,

the secondary sector comprising manufacturing utilities and

construction activities, the tertiary sector comprising service

activities like banking, transportation, communication, real

estates and other business services. The industrial sector is

represented in the secondary sector. The manufacturing

industry accounts for a significant share of the industrial sector

in the developed countries, this is however not so in Nigeria as

the manufacturing sector is seriously lagging behind in its

contributions to the industrial sector output. According to

international standards, a country is said to be industrialized if

 11

her industrial output is at least 25% of her GDP, 60% of the

output is contributed by the manufacturing sub-sector and of

the population, at least 10% are engaged in manufacturing. By

all standards, Nigeria has fallen short of this requirement.

Industrial growth rate ranges between -9.2% which is far below

standard, hence a lot of attention needs to be put into this

sector as it will contribute immensely to the development of the

Nigerian economy as a whole.

In terms of special pattern, establishment reports from

various studies show that industries in Nigeria are concentrated

in some areas, especially in big cities and state capitals (Ajayi

2009). There is a marked concentration of manufacturing

establishments in the southern part of the country especially

Lagos, Ibadan, Benin. Other locations of relatively highs

concentration of industrial establishment are Kano and Kaduna

in the North, Enugu and Port Harcourt in the south east. The

Nigerian industrial sector has also tended to be characterized

by routine production activities, spatial pattern of distribution,

 12

inability to revolutionize production due to mainly low

technology, simple assembly processes, low wages, production

of light consumer goods and, resource and labour-intensive

industries. It is in view of this that we analyze the contributions

of the industrial sector to economic growth and the way

forward.

1.9 Definition of terms

1. Economic Development: This is defined as a

sustainable increase in living standards that

encompasses material consumption, education, health

and environmental protection (World Bank 1991).

2. Industrial Development: This is the process by which

a nation acquires a competence in the manufacturing of

equipment and products required for sustainable

development.

3. Industrialization: This is defined as the process of

developing the capacity of a country to master and

 13

allocate within its border, the whole industrial production

processes, production of raw materials, fabrication of

machines an tools required for the manufacture of the

desired products and of other machines, skills to operate

maintain and reconstruct the machines and tools; skills to

manage factories and to organize the production process

(Abba et al 1985).

4. Economic Growth: This refers to a long-term rise in

the capacity of a nation to supply increasingly diverse

goods to its population, thus growing capacity based on

advancing technology and the institutional and ideological

adjustment it demands.
 14

CHAPTER TWO

LITERATURE REVIEW AND THEORETICAL FRAMEWORK

2.0 Introduction

This chapter examines critically the theoretical arguments

of the different schools of thought on industrialization and the

empirical literature review will be examined.

2.1 Literature review

Several writers have contributed towards the

development of the economy through the industrial sector.

According to the World Bank, industrial development and

technological infrastructure drives productivity. As indicated by

Ayogu (2007), Dowall (2001), World Bank (1994), infrastructure

provides the environment for productive activities to take place

and facilitates the generation of economic growth. Availability of

an efficient infrastructural network can stimulate new

investment, increase productivity and enhance growth and

development. At the global level it will enhance competition.

 15

Nyong (2001) reveals that there is a strong interaction

between industrialization, exports and economic development.

Sustained economic development requires a transformation on

the structure of production that is consistent with the evolution

of domestic demand and opportunities for international trade.

Thus transformation usually result in substantial increase in the

share of industrial exports and a shift away from dependency

on primary commodity exports towards semi-manufactured and

processed commodities as an important source of foreign

exchange earnings.

Ndebbio (1989a; 1991c and 2002) suggests that Nigeria

should put together a package of dynamic industrialization

policy that has the capacity to positively transform small

businesses in terms of finding, of providing adequate

infrastructural facilities and of protecting. Egwaikhide (1997)

observed that “effective rates of protection have not favoured

the capital goods subsector, a factor responsible for the gross

under development of the intermediate and capital goods

 16

manufacturing sub-sector that constitutes the engine of

industrial expansion in the long run”.

Asiodu (1967), and Philips (1967, 1968) conducted a

critical examination of the effect of fiscal incentives on industrial

growth focusing on Nigeria’s company income tax, import duty,

relief and the approval user scheme. Philips noted that there

was substantial loss of revenue arising from the approved user

scheme was too cumbersome due to bureaucratic tapism and

bottle necks. Far more startling is the revelation that “tax

incentives had not remarkable effects on the growth of

industries, since about 60 of the manufacturing enterprises that

benefited from these measures would still have established

without the measures”. The findings by Philips stand in

contrast to those of Kilby (1967) who attributed rapid

industrialization in other parts of the world to government

policies. The difference between the Nigerian experience and

else where, according to previous studies, is that fiscal

incentives granted to industries together with macro economic

 17

policies were formulated with little or no internal logic as there

were not sufficiently discriminatory an selective (Aboyade

1986). The failure of Nigeria’s import – substitution

industrialization strategy could be ascribed to the absence of

internal dynamism for the anticipated self sustained growth and

development.

Nigerian government intervention in industrial activities

partly reflected in the establishment of commercial, merchant

and development banks held little sway. Some reasons being

that there were lots of government bureaucracy, regulatory and

fiscal policy. Also there was problem of a hostile or

unconducive operating environment that created uncertainties

and unmanageable unknowns for entrepreneurs, industrialist,

innovators and serious business people. By and large big

business and industries are necessary to preserve and

maintain the structure within the economy.

A country is said to be industrialized if her industrial

output is at least 25% of her GDP, 60% of the output is

 18

contributed by the manufacturing sub-sector and of the

population at least 10% are engaged in manufacturing. By

implication, policies should be focused on how to revolutionize

production and as such create employment, create wealth for

the nation, facilitate alleviation of poverty, material consumption

etc. which are features of a developed economy.

2.2 Components of economic growth and development

Three components of prime importance area;

1. Capital accumulation, including all new investments in

land, physical equipment, and human resources

through improvement in health, education and job

skills.

2. Technological progress

3. Growth in population and hence eventual growth in the

labour force.
 19

Capital accumulation

Capital accumulation results when some proportion of

present income is saved and invested in order to augment

future output and income. New factories, machinery,

equipment and materials increase the physical capital stock of

a nation (the total net real value of all physically productive

capital goods) and make it possible for expanded output levels

to be achieved. These directly productive investments are

supplemented by investment in social and economic

infrastructure like road, electricity, water, sanitation,

communication and the like, which facilitates and integrates

economic activities.

Technological progress

Technological progress is considered by many economist

to be the most important source of economic growth and

development. Technological progress results from new and

improved ways of accomplishing traditional tasks such as textile

 20

making, electricity generation, or building of a house. There are

three basic classification of technological progress which are

neutral, labour saving and capital saving technological

progress. Capital saving technological progress is needed

most in developing countries and this applies best to our

research work. It ensures a more efficient (low cost) labour

intensive method of production. The indigenous LDC

development of low cost, efficient, labour – intensive (capital

saving) techniques of production is one of the essential

ingredient in any long-run employment oriented development

strategy.

Population and labour force growth

Population growth and the associated eventual increase

in the labour force has traditionally been considered as a

positive factor in stimulating economic growth. A larger labour

force means more productive workers and a large overall

population increases the potential size of domestic markers.

 21

However it is questionable whether rapidly growing supplies of

workers in developing countries with a surplus of labour exert a

positive or negative influence in economic progress.

Obviously it will depend on the ability of the economic

system to absorb and productively employ these added

workers, on ability largely associated with the rate and kind of

capital accumulation and the availability of related factors such

as managerial and administrative skills.

2.3 Theoretical framework

2.3.1 Cobb-Douglas (C-D) neoclassical production function

By using basic cobb-douglas production function, it is

possible to demonstrate how the formal neoclassical production

function can be unrestricted. Given its formula

Q = AK aLc ……….

To linearize the output function, both sides of equation

(1), are logged thus:

Log Q = Log A + B Log K + C Log K ----------------2.2

 22

Where:

Q = Output (could be GDP or industrial output)

A = State of technology or efficiency parameter

K = Capital employed

L = Labour employed

b and c are weights such that b + c = 1

(displaying constant returns to scale)

Equation 2.1, can be written in a standard form to

accommodate other variable like human capital (H) considered

as a unique factor different from labour force (L) in some

literature (Mathew 1975).

Q = F (C,K,L,A,H ------------------) ……………………2.3

It is important to point out that the cob-douglas function

shown in equation 2.3, above is usually criticised for being

unsatisfactory. Both the restrictive and unrestrictive

assumptions on which the function is based tells the basis of

the criticism. These assumptions are:

 23

1. That the labour and production assets are the only

factors that affect output or national income.

2. That the function is homogeneous of degree one

however by taking account of the fact that some

production processes are characterized by increasing

returns to scale, the usual C-D function can be

modified to give:

Qt = AK bLc + ----------------------------------------- 2.4

Where b + c > 1. Indicating increasing returns to scale. By

introducing an exponential component into the function it

becomes

Q = AKn + L1-n + ev+s + vt ------------------------------- 2.5

Where:

Vt = the average annual increase in a nations income

due to efficiency in the use of factor inputs n + 1 – n = 1, the

same as equation 2.1 where b + c = 1, a situation of constant

returns to scale. The log form of equation 2.5, is thus: Log Qt =

Log A t n Log Kt t (1-n) Log t t V Log et ----------------------2.6

 24

The above modification which is quite ideal can be

extended to take account of other functions that affect output

such as quality of natural resources, the organization of

production and influence of the unspecified factors. Such

changes are taken care of by using a time variable. This makes

the function become:

Qt = f(k,L,t) ------------------------------------- 2.7

2.3.2 The Romer model

The Romer model addresses technological spill over that

may be present in the process of industrialization. The model

begins by assuming that growth process is derived from the

firm or industry level. Each industry individually produces with

constant returns to scale, so the model is consistent with

perfect competition. In this simplification, we abstract from the

household sector, on important feature of the original model, in

order to concentrate on issues of the industrial sector. Formally,

we have
 25

Y = AK∞ L1-∞ K-β ------------------------------ 2.8

We assume symmetry across industries for simplicity, so each

industry will sue the same level of capital and labour. Then we

have the aggregate production function:

V = AK∞ + βL1-∞ ---------------------------------2.9

To make endogenous growth stand out clearly, we assume that

A is constant rather than rising overtime i.e. we assume that

there is no technological progress. This results to:

g-n = β -------------------------------------------------------2.10

(1 - ∞ + β)

Where:

g = output growth

n = population growth rate

Romer assumes that taking the three factors together,

including the capital externality, β > 0, thus g – n > 0 and Y/L is

grown up. Now we have endogenous growth depending on the

level of savings and investment undertaken in the model not

driven exogenously by increase in productivity. The place of

 26

interest in Romer model is that with an investment spillover, the

model avoids diminishing returns of capital.

2.3.3 The Harrod – Domar growth model

Harrod – Domar theory of economic growth states that

the rate of growth of GDP is determined jointly by the net

national savings ratio, s, and the national capital – output, k.

More specifically, it says that in the absence of government, the

growth rate of national income will ne directly or positively

related to the savings ratio and inversely related to the

economy’s capital – output ratio.

∆Y = S------------------------------------------------2.11
Y K

Expressing this in term of gross savings SG,

We have:

∆Y = SG - S---------------------------------------2.12
Y K

Where S is the rate of capital depreciation equation 2.11

and 2.12 can be explained thus.

 27

To grow, economics must save and invest a certain

proportion of their GDP. The more they can save and invest,

the faster they can grow. But the actual rate at which they can

grow for any level of saving and investment can be measured

by the inverse of the capital. Output ratio, k, because this

inverse, 1/K, is simply the output – capital or output –

investment ratio. It follows that multiplying the rate of new

investment, S = 1/Y, by its productivity, 1/K, will give the rate by

which national income or GDP will increase. The main obstacle

to or constraint on development according to this theory is the

relatively low level of new capital formation in less developed

countries.

2.3.4 The Solow neoclassical growth model

This model implies that economies will conditionally

converge to the same level income given that they have the

same rates of savings, depreciation, labour force and

productivity growth. Thus the model is the basis for the study of
 28

convergence across countries. The key modification from the

Harrod – Domar Model is that the solow model allows that

substitution between capital and labour.

Solows growth model exhibits diminishing returns to

labour and capital separately and constant returns to both

factors jointly. Technological progress thus becomes the

residual factor explaining long-term growth, which is determined

exogenously i.e. independent of all other factors.

More formally, the standard exposition of the solow

neoclassical growth model uses an aggregate production

function in which:

Y = K∞ (AL)1-∞ --------------------------------- 2.13

Where:

Y = is gross domestic product

K = is the stock of capital (human and physical)

L = is labour

A = represents productivity of labour which grows at an

exogenous rate.
 29

∞ = represent the elasticity of output with respect to

capital

1-∞ = is assume to be less than 1 and private capital is

assumed to be paid its marginal product, thus there are no

external economies. This formulation of neoclassical growth

theory yields diminishing returns to both capital and labour.

2.4 Overview of Nigerian industrialization experience

This overview is categorised into the following eras;

i. The pre - independence era (1947 – 1959)

ii. The post – independence era (1962 – 1969)

iii. The oil boom era (1970 – 1980)

iv. The immediate pre-SAP era (1981 – mid 1986)

v. The post – SAP era (mid 1986 till date).

2.4.1 The pre-independence era (1947 – 1959)

In this phase, Nigeria made efforts towards industrial

development activities as well as the drive towards deliberately

 30

wooing foreign investors into Nigeria. The inflow of foreign

capital was encouraged by liberal industrial legislations, the

relative backwardness of the country at the time being

acknowledged. Tools like tariffs, subsidies, various taxes and

licensing were freely deployed. The colonial government did not

show a committed interest in the development of the country.

According to Bexkman (1985), apart from basic investments in

ports, roads an drails, and the enforcement of law and order,

there was little investment in public services economic of social.

During this period, manufacturing was limited top primary

processing of raw materials for export an the production of

simple consumer items by foreign multinational corporations

anxious to gain a foothold in a growing market. During this

period, manufacturing was mostly resource – based, but some

elements of import – substitution and imported raw materials

base was already present.

 31

2.4.2 The post – independence era (1962 – 1969)

At independence, the state of the industrial sector was

poor. Nigeria lack sufficient capital, technology, managerial

skills and entrepreneurial initiative to function effectively in a

dominated modern sector. Hence policies enacted were

dominated by the deliberate design and application of diverse

incentives aimed directly at attracting foreign capital,

technology and skills. Company income tax act of 1961 was

thus enacted to provide liberal tax rates for companies, profits

as well as liberals depreciation allowances for capital

expenditures as high as 73%; the establishment of the Nigerian

Industrial Development Bank (NIDB) in 1964, aimed at

stimulating industries by giving out loans at low interest rate to

entrepreneurs (Ndebbio, 1994).

The 1960s era was characterised by more vigorous

import substitution and the beginning of decline in the export –

oriented processing of raw materials. Economic diversification

was promoted as a means of reducing the economy’s

 32

dependence on the agricultural sector as the principle earners

of foreign exchange. In terms of its contributions, the

industrials sector accounted for mere 7.7% of output while the

manufacturing sector contributed 3.8% of output.

2.4.3 The oil – boom era (1970 – 1980)

In this era, two phases of industrial development stand

out:

a. The transition phase (1970 – 1974)

b. The commanding heights phase (1975 – 1980)

A. The transition phase (1970 – 1974)

This phase coincided with the second national

development plan (1970 – 1974). At this phase, it was vital for

government to acquire and control, on behalf of the Nigerian

society, the greater proportion of the productive assets of the

economy. This largely informed the promulgation of the Nigeria

Enterprises promotion Decree (NEPD) in 1972 (FRN) and the

 33

subsequent indigenization programme in the country, still within

the context of an import substitution industrialization strategy.

The indigenization policy was to give Nigerians the

opportunity to demonstrate their ability to assume ownership,

control and management of a great part of the nations

economy. It was the benchmark of all industrial policies and

incentives in the 19070s. the goals of industrial policies were

largely to promote even development, fair geographical

industrial distribution, rapid expansion and diversification of the

economy’s industrial base, promote export – oriented industries

to create forward and backward linkages in the economy, and

liberalize entry into the industrial sector inorder to attract both

indigenous and foreign investors.

B. The commanding heights (1975 – 1980)

During this period, the Nigerian Enterprises Promotion

Decree (NEPD) enacted in 1972 was amended in 1977. This

sought to involve more Nigerians in the ownership, control and

 34

management of certain enterprises through creating

opportunities for indigenous businessmen by raising the

proportion of industrial ownership of investments in industries,

and by increasing the participation of Nigerians in decision

making in the management of larger commercial and industrial

concerns. The contribution of petroleum to the Nigerian

economy became quite pronounced in the 1970s. During this

decade the contribution of the industrial sector to GDP rose

from 13.76% in 1970 t0 37.8% in 1979. This period witnessed

very rapid growth in industrial investment, output and the

number of industrial establishment.

2.4.4 The immediate pre-SAP era (1981 – 1986)

The period between 1980 and 1986 saw a mix success in

the growth of the industrial sector because of the global

economic crisis of 1980s, the negative effect of austerity

measures and structural adjustment programme introduced in

1982 and 1986 respectively. Also during this period GDP

 35

growths rate was 2.9% while the manufacturing sector recorded

an average growth rate of 2.5%. The economy was saddled

with the problems of unemployment, inflation, high level of

external and internal debt and unproductive capacity of the

economy. Thus the SAP of 1986 was introduced to revert the

poor performance of the economy.

2.4.5 The post – SAP era (mid 1986 till date)

With respect to industrialization strategy the relevant

dimensions of SAP were the devaluation of the naira exchange

rate in terms of foreign currencies, the design of appropriate

tariff structure to serve the dual purpose of ensuring a more

efficient import substitution and promoting manufactured

exports, and the privatization/commercialization of public

enterprises. Exchange rate and tariff policies were relatively

liberalized.

The structural adjustment programme adopted has had

both negative and positive effects on the Nigerian economy.

 36

According to Iyoba and Oriakhi (2002), the structural

adjustment programme adopt to battle the economic crises and

bring about a restructuring of the economy had a favourable

effect on agriculture but a negative effect on manufacturing.

According to reports from international labour organization (ILO

1996), the structural adjustment programme led to a process of

industrialization and rising unemployment.

2.5 Factors affecting industrial development

Having looked at an overview of industrialization in

Nigeria, the following have been highlighted as factors affecting

industrial development in Nigeria.

i. Policy errors of the past

ii. Inefficient institutional framework

iii. Poor and inadequate infrastructure

iv. Lack of an enabling environment

 37

v. Low access to investible funds due to

underdeveloped long-term capital market that match

industrial project needs.

If these problems are properly looked into, the

contributions of the Nigerian industrial sector will be greatly

increased.
 38

CHAPTER THREE

RESEARCH METHODOLOGY

The objective of this chapter is to present a brief outline of

methodological approach of the study. This outline comprises of

the sources of data, model specification and method of

estimation and validation.

3.1 Source of data

This research work relied solely on secondary sources of

data. These were sourced from various publications of the

National Bureau of Statistics (NBS), Central Bank of Nigeria

(CBN) annual reports and statistical bulletin for various years,

World Bank reports for various years. References were made to

journals of the Nigeria Economic society including also

textbooks relating to the field of study. Data used for the study

is of the time series sort from the year 1980 – 2011. The use of

the above set of data means that errors in the measurements

 39

could be imported into our research work. Our focus here is to

adopt the empirical form of correlation research.

3.2 Model specification

We propose the use of two empirical models. The first

model has total output (RGDP) as a measure of productivity

being the dependent variable while output in the industrial

sector as a whole being the independent variable.

Symbolically we propose that:

RGDP = F(Ind, U) ----------------------------------3.1

Where:

RGDP = total output or real gross domestic product

Ind = output in the industrial sector

U = stochastic error term

The above model will be estimated using the ordinary

least square (OLS) method as:

RGDP = bo + b1 Ind + U

Where: bo, b1 > 0

 40

For effective result, the logarithm form will be used. It is given

as:

LOG(RGDP) = bo + b1 Log Ind + U --------------------3.3

Where LOG = logarithm

U = Stochastic error term

Other variables as explained earlier

The second model has totals output (RGDP) as a

measure of productivity being the dependent variable while

output in the various sectors of the industry constituting the

independent variables. Symbolically, we propose that

RGDP = f(Manu, Min, Elec, B/CONT, WAT, U) ------------3.4

Where: RGDP = Total output

Manu = Output in the manufacturing sub sector

Min = Output in the mining sub sector

Elec = Output in the electricity sub sector

B/CONT = Output in the building/construction sub sector

WAT = Output for water supply

U = Stochastic error term

 41

The above model will be estimated using the ordinary

least square (OLS) as;

RGDP = bo + b1 MANU + b2 MIN + b3 ELEC + b4

B/CONT + b5 WAT + U -----------------------------------3.5

Where bo,--------------, b5 = estimated parameters.

For effective result, the logarithm form can be sued it is given

as:

LOG(RGDP) = bo + b1 LOG MANU + b2 LOG MIN + b3 LOG

ELEC + b4 LOG B/CONT + b5 LOG WAT + U ------------3.6

Where LOG = Logarithm

U = Stochastic error term

Other variable as explained earlier

3.3 Method of estimation and validation

The ordinary least square (OLS) method would be

employed since it satisfies the Gauss – Markov theorem. The

OLS is given as the best option due to the following;

i. It is the best linear unbiased estimator (BLUE)

 42

ii. Data requirement are not excessive

The result will be analyzed using

- Economic “apriori” criteria

- Statistical criteria, and

- Econometric criteria

3.3.1 Economic "apriori" criteria

An economic apriori criteria is determined by economic

theory and refers to the sign and the size of the parameters or

economic relationship. Generally, if the apriori criteria are not

satisfied the estimated result should be considered

unsatisfactory (Ksoutsoyiannis 2003; 26).

3.3.2 Statistical criteria

This include the following:

a. the student t - statistics

The student t - statistics is most appropriate because the

sample size is 32. It judges the reliability of the regression

 43

coefficient. Also, it measures the degree of coefficient and

helps the researcher to determine the significance of the given

estimates.

The formula is given by:

t = b1
S(b1)

b1 = the estimated parameter

S(b1) = The standard Error

The decision rules

If t > tt; we accept the alternate hypothesis (H1) that the

estimate is significant.

b. Coefficient of multiple Determination (R2)

R2 is used in multiple regressions to show

the explanatory power of the independent variable. The

greater the R2 the greater the percentage of variable

of the dependent variable explained by the

independent variables.
 44

c. Adjusted coefficient of multiple Regression (R2) since

additional variables to the function increases the

numerator, the denominator remaining the same, R2 is

adjusted taking account of the degree of freedom which goes a

long way in decreasing as the new regressions are introduced

into the function.

Adjusted R2 = 1-(1- R2) N + 1

N-K

Where:

M = Number of Samples

K = Number of parameters

R2 = Multiple regression coefficient

D. F - statistics

This is used to determine if the R2 is statistically

significant. It is given by;

F = R2/K-1
(1 - R2)/N-K

Acceptance criteria:
 45

If F > Ft at a level of significance of 5%, we accept that R2 is

statistically significant at that level.

3.3.3 Econometric criteria

This states the existence or other wise of

autocorrelation between the explanatory variables and the error

term. However, the test is appropriate for only the first order

auto-regression scheme.

DW is given by

∑(𝑒𝑡 − 𝑒𝑡 −1
)
=
∑ 𝑒𝑡2

Where:

et = present error

et-1 = Previous Error

DECISION RULE;

Reject the null hypothesis: Ho: bi = 0

If d, du or d > 4 - du
 46

Accept the null hypothesis: if du < f (4-du) when dL, d < du

and 4-du <d <4-dL. We conclude that we cannot say whether

auto correlation exist.

 47

CHAPTER FOUR

DATA PRESENTATION, ANALYSIS AND DISCUSSION OF

FINDINGS

4.1 Model specification

This research work makes use of two models.

Model 1: We propose the empirical model which has total

output (RGDP) as a measure of economic productivity being

the dependent variable, while output in the industrial sector

constitute the independent variable symbolically;

RGDP = F(Ind) + U

Where; RGDP = real gross domestic product

Ind = Output in the industrial sector

U = Stochastic Error Term

Using the ordinary least square (OLS) method

of estimation, and also with the use of the logarithm form,

model one can be written as:

LOG (RGDP) = bo + bi LOG (Ind) + U

 48

Where LOG = Logarithm

bo and bi = Estimated parameters

classical time series data was used.

MODEL 2: We propose the empirical model which has total

output (RGDP) as a measure of economic productivity being

the dependent variable, while output in the various sectors of

the industry constituting the independent

variables.

Symbolically, we propose that

RGDP = F (MANU, MIN, ELEC, B/CONT, WAT,U)

Where: RGDP = real gross domestic product

MANU = Output in the manufacturing sector

MIN = Output in the mining sub sector

ELEC = Output in the Electricity sub sector

B/CONT = Output in building and construction sub-sector

WAT = Total water output

 49

U = Stochastic Error term

Using the ordinary least square (DLS) method of estimation,

and also with the use of the logarithmic form, model two can be

written as;

LOG (RGDP) = bo + bi LOG MANU + b2 LOG MIN +

b3LOG Elec + b4 LOG B/CONT + b5 LOG WAT + U.

Where: bo, ----------, b5 > 0 (Estimated parameters)

LOG = Logarithm, other variables as explained earlier.

Time series data was used.

4.2 Presentation of result

MODEL 1 RESULT:

The empirical result is presented as :

LOG (RGDP) = 2.507236 + 0.991731 LOG Ind

t = (4,793618) (19.41995)

R2 - 0.926314

Adjusted R2 = 0.923858

F - statistic = 377.1346
 50

Durbin - Watson statistic = 0.280830

T- values are written in brackets.

MODEL 2 RESULT

The empirical result is presented as:

LOG (RGDP) = 1.447442 + 1.083697 LOG MAN +

(1.407378) (8.841529)

0.239387 LOGMIN + 0.093385 LOG ELEC +

(1.725372) (2.661191)

0.069167 LOG B/CONT + 0.177753 LOG WAT

(0.214805) (0.922734)

R2 = 0.9584 22

Adjusted R2 = 0.950426

F - statistic = 119.8667

Durbin – Watson statistic = 0.720616

T- values are written in brackets.

 51

4.3 Analysis of results

The two empirical results will be analyzed

using the following criteria

- Economic apriori criteria

- Statistical criteria

- Econometric criteria

ECONOMIC APRIORI CRITERIA

RESULT 1

The empirical result shows that the coefficient of

2.507236 for the constant term is consistent with economic

apriori expectation. The estimate has a positive sign which

moans that if no production activity takes place in

the industrial sector, RGDP will increase by 2.51%.

The empirical result further indicates that the

coefficient of 0.991731 for industrial output is

consistent with economic apriori expectation. This shows

that there is a positive relationship between industrial sector

 52

output and RGDP. Thus, a one percent increase in industrial

output will lead to a 0.99% increase in RGDP all things being

equal.

RESULT 2:

The empirical result shows that the coefficient of

1.447442 for the constant term is consistent with economic

apriori expectation. The estimate has a positive sign which

means that if no production activity takes place in the

various sectors of the industry, RGDP will increase by

1.45%.

The empirical result indicates that the coefficient of 1.083697

for manufacturing is consistent with economic

apriori expectation. This shows that there is a

positive relationship between manufacturing sector output

and RGDP. Thus a one percent increase in manufacturing

output will lead to a increase in 1.08 percent RGDP all things

being equal.
 53

The result further shows that the coefficient

of 0.239387 for mining is consistent with

economic apriori expectation. This is because there

is a positive relationship between mining and RGDP. Thus a

one percent increase in mining will lead to a 0.24 percent

increase in RGDP all things being equal.

Also, the empirical result shows that the coefficient of

0.093385 for electricity is consistent with economic apriori

expectation. This is because there is a positive

relationship between electricity production and RGDP. Thus, a

one percent increase in electricity production will lead to a 0.09

percent increase in RGDP all things being equal.

Furthermore, the result shows that the coefficient of

0.069167 (or building and construction is consistent with

economic apriori expectation. There is a positive

relationship between building/construction output and RGDP.

 54

Thus, a one percent increase in building

and construction output will lead to a 0.07 percent

increase in RGDP all things being equal.

Finally, the coefficient of 0.977753 for water

is consistent with economic apriori expectation.

There is a positive relationship between water utility and

RGDP. Thus, a one percent increase in water utility will lead to

a 0.18 percent increase in RGDP all things being equal.

STATISTICAL CRITERIA

The t - statistics is used to measure

the - statistical significance of a variable.

From the statistical table, t-tabulated (t0.025,32) is 2.042.

At 5% level of significance t-tabulated is 2.042.

RESULT 1

The empirical result shows that industrial sector output is

significant at 5% level of significance. T-calculated is

19.41995 which is greater than t-tabulated of 2.042.

 55

RESULT 2:

The empirical result shows that electricity and

manufacturing are statistically significant at 5% level of

significance. The constant term, building/construction,

mining and water are not statistically significant at 5% level of

significance. However, mining is statistically significant at

10% level of significance (t0.10,32) is 1.697.

RESULT 1:

The adjusted R2 is given as 0.923858. this indicates

that 92.39% of total variation in real GDP is accounted for by

the independent variable, only about 7.61% is

unaccounted for by the independent variable. This may not be

included in the model but is captured by the stochastic error

term. It can therefore be said that the model has a good fit on

the data and also has a high predictability power. The F -

statistics shows the overall significance of the explanatory

variables. The F-calculated of 377.1346 is greater than the F-

 56

tabulated of F 0.1 (1) (32) and F0.05 (1) (32) which are 7.56

and 4.17 respectively. This means that the adjusted R2 is

statistically reliable, hence there is a significant relationship

between the dependent variable and the independent variable.

RESULT 2

The adjusted R2 is given as 0.958422. this indicates that

95.84% of total variation in real GDP is accounted for by the

independent variables, only about 4.16% is unaccounted for by

the independent variables. This may not be included in the

model but is captured by the stochastic error term. It can

therefore be said that the model has a good fit on the data and

also has a high predictability power.

The F-statistics shows the overall significance of the

explanatory variables. The F-calculated of 119.87 is greater

than the f tabulated of F0.01(5) (32) and F0.05 (5) (32) which

are 3.70 and 2.53 respectively. This means that the

adjusted R2 is statistically reliable, hence there is a

 57

significant relationship between the dependent and the

independent variables.

ECONOMETRIC CRITERIA:

RESULT 1:

K = 2; = K-1 = 2-1 =1

dL = 1.373 4-dL = 2.63

du = 1.502 4-du = 2.50

dw statistic = 0.280830

RESULT 2:

K = 6; K1 = 6-1 = 5

dL = 1.11 4-du 2.89

dw statistic = 0.720616
 58

The diagram below will be used in explaining the variable

Inconclusive region

Negative autocorrelation
Positive autocorrelation

Inconclusive region

No autocorrelation

dL Du 4-du 4-dL

1.373 1.502 2.50 2.63 result 1

1.11 1.82 2.18 2.89 result 2

 59

From the diagram we observed that at 5%

level of significance, the d-value for the two empirical

results falls within the positive auto correlation region.

4.4 Test of hypothesis

To test the hypothesis, we are using t -

statistics. According to this test if t > tt, we accept that the

estimate is significant. This applies to the economic apriori

criteria.

MODEL 1: HYPOTHESIS

We propose that:

Ho = bi; Industrial sector output has no significant

impact on RGDP from the empirical result, the t - value for

Industrial sector output is 19.41995 which is greater than the t-

tab value of 2.042 at 5% level of significance. We reject the

null hypothesis and accept the alternative hypothesis that

industrial sector output has a significant impact ton the RGDP.

 60

MODEL 2:

Hypothesis 1

Ho = bi: manufacturing output has no significant

impact on RGDP

H1 = bi: manufacturing output has a significant impact on

RGDP.

From the empirical result, the t-value for manufacturing

output is 8.841529 which is greater than the t-tab value of 2,042

at 5%level of significance. We reject the null

hypothesis and accept the alternative hypothesis that

manufactory output has a significant impact on the RGDP.

Hypothesis

The proposition is:

Ho = b1: mining output has no significant impact on RGDP.

H1 = b1 Mining output has a significant impact on RGDP.

 61

From the empirical result, the t-value for mining output is

1.725372 which is less than the t-tab of 2.042 at 5% level of

significance. Thus we accept the null hypothesis that

mining output has no significant impact on RGDP at 5% level at

10% level, it has significant impact.

HYPOTHESIS III

We propose that:

Ho = bi Electricity supply has no significant impact on

RGPP.

H1 - bi: Electricity supply has a significant impact on

RGDP

From the empirical result, tine t value for electricity is

2.561191 which is greater than the t-tab value of 2.042 at 5%

level of significance. We reject the null hypothesis and accept

the alternative hypothesis that electricity supply has a

significant impact on RGDP.

 62

HYPOTHESIS IV

The proposition is;

Ho - bi: Building/construction output has no significant

impact on RGDP.

H1 = bi: Building/construction output has a

significant impact on RGDP

From the empirical result, the t value for

building /construction is 0.214805 which is less than the t-

tab of 2.042 at 5% level of significance. thus we accept the

null hypothesis that building/construction has no

significant impact on RGDP.

Hypothesis v

The proposition is:

Ho = b1: Water has no significant impact on RGDP

H1 = b1: Water has a significant impact on RGDP.

From the empirical result, the t value for water is 0.922734

which is less than the t-tab of 2.042 at 5% level of significance.

 63

Thus, we accept the null hypothesis (Ho) that water has no

significant impact on RGDP.

4.5 Economic implication of result

The implications of the empirical results

are summarized as follows:

1. The result show a positive relationship between output in

the industrial sector and real gross domestic

product. This means that a rise in output of the industrial

sector due to its development will lead to an increase in

real GDP which is our measure of productivity.

2. Government polices are relevant both in the short -run

and long-run hence policies aimed at developing the

industrial sector should be targeted.

 64

CHAPTER FIVE

SUMMARY, RECOMMENDATION AND CONCLUSION

5.1 Summary of major findings

This research work examined the contribution of the industrial

sector output to real gross domestic product (RGDP)

between 1980-2011. The ordinary least square (OLS) method

was employed to show the relationship between the

dependent variable, real gross domestic product (RGDP) and

the independent variables which are industrial output, mining,

manufacturing, electricity, building of construction and water

supply. From the analysis carried out, a positive relationship

exists between industrial output and real gross domestic

product (RGDP). This means that industrial output in the

economy stimulates and enhances economic growth and

development. However the Nigerian industrial sector is unable

to maximally utilize its available resources to ensure optimum

output. Thus is as a result of high cost of production due

 65

mainly to obsolete machinery and equipment, the unavailability

of social and economic infrastructure whichfacilitates and

integrates industrial activities. The importation of raw

materials and machineries is also a major setback. Industries

have mainly been sited in urban areas and this has led to

lopsided development. Infrastructural facilities are made

available majorly in areas where industries are sited, lacks of

good financial Institutional framework, limited employment

opportunities due to the capital intensive nature of their

operations, reduction in government revenue through excessive

tax concession granted them by the government.

5.2 Policy recommendations

In view of the foregoing analysis of the contributions of

the industrial sector to the development of Nigeria, the following

recommendations are put forth:

1. Government should promote and encourage small scale

industries, thereby enhancing and increasing output

 66

inorder to stimulate economics growth and

development in Nigeria.

2. Financial institutions should extend credit facilities to the

infant industries.

3. The manufacturing industry should be encouraged to

produce and utilize local inputs. Also low cost,

efficient, labour intensive technique of production

should be adopted.

4. Government should invest in the energy sector inorder to

ensure improved generation, transmission and

distribution of power supply. Also alternative sources of

energy should be harnessed e.g. use of water, solar,

coal etc. This will help to reduce per unit cost of

production.

5. Government should employ on appropriate mix of

monetary, fiscal and price policies to promote

industrial sector development.

 67

5.3 Conclusion

This study examined the impact of the contributions of the

industrial sector to economic development, 1980-2011. It is

acknowledged that industrial sector output enhances economic

growth and productivity. Findings however indicate that not all

sub-sectors of the industry significantly contribute to real gross

domestic product (RGDP). Since an increase in industrial

output will lead to an Increase in real gross domestic product,

strategies aimed at improving on industrial production should

be developed for possible implementation. This will

ensure increased output in both the industrial sector

and the economy and bring about economic growth and

development in the long-run.

 68

REFERENCES

Abba, A. et al (1985); "The Nigerian

Economic Crises: Causes and solutions. Publication
of tine Academic staff union of Universities of Nigeria,
Zaria: Gaskiya Press.

Aboyade (1986); The Development Process" conference on

National reconstruction and development in
Nigeria March.

Ajayi (2009); Manufacture and construction. Ife.

Heinemam. Educational Books.

Asiotlu, W C. (.1.993); Industrial Policy and Incentives

in Nigeria. N.JESS.

Ayogu (2007); Infrastructure and Industrial sector

Development. The Nigerian Journal of Economic and
social studies.

Bexkman (1985); Nigeria since Independence, the First 25

years, Ibadan: Heinemann Educational Books.

Central Bank of Nigeria (2011); statistical Bulletin

Damodar. G. (1999); Essentials of Econometrics. McGraw- Hill

company, United states.

Dowall (2001), Technological Capabilities and

industrialization, World Development Vol. 20, No.2.

Egwaiklude F. O. (1997); Import Substitution Industrialization in

Nigeria. A selected review NJESS.
 69

FRN – Federal Republic of Nigeria (1972); Nigerian Enterprise

Promotion Decree, 1972). Supplement of official Gazzett,
No 10, Vol 59, Part A.

Herrick and Kindlebeerger (1984); An introduction to Modern

Theories of Economic Growth, New York: McGraw; Hill
Books Co.

International labour organization (1996); Global Employment

trends. Geneva International labor office.

Iyoha and Oriakhi (2003); Design and

management of sectorial policies in Nigeria:
Industrial policy under SAP. NCEMA, Ibadan.

Kilby P. (1969); Industrialization in an open

Economy: Nigeria – 1945 - 1996 Cambridge.

Kourtsoyannis A. (2003); Theory of Econometrics Macmillan;

New York.

Matthew (1975); The contributions of Science and

Technology to Economic Development. London:
Macmillan press Ltd.

Ndebbio, J. E. U. (1991); Industrial Development

policies/incentives and their effectiveness. University
of Calabar press, Calabar.

Ndebbio (1994); Technological Capabilities, Capacity Utilization

and Self-reliant Growth in some parts of Southern
Eastern Nigeria: A case for policy in the manufacturing
sub-sector. Paper presented at a workshop organized by
African Technologies policy studies (ATPS) in Harare,
Zimbabwe.
 70

Ndebbio (1989); Industrial Research and development in Africa,

in John Forje (ed) science and Technology policy in
Africa, London; Longman publishing.

Ndebbio (2002); The Role of Multinational companies in the

economic backwardness of the Niger Delta. Nigerian
Journal of social and Development issues Vol. 2, No.1.

Nyong (2001); public Policy, public sector Economics and

management in Nigeria, University of Calabar press,
Calabar.

Nyong M. O. (2005); International Economics: Theory, Policy

and Application: Wusen-publishers, Calabar. Philips
(1967, 1968); Industrialization in Nigeria: A spatial
Analysis. Welt forum verlag, Munisch.

Todaro, M. P. (1982) Economic Development in the third

World New York: Longman publisher.

World Bank (1991), Annual Conference on Development

Economics, Washington D. C.

World bank (1994); Infrastructure for Development, World

Development Report 1994, New York: Oxford
University press.

World Bank Development Report 1985, World Bank

Washington D. C.
 71

DATA PRESENTATION

RGDP MANU MINING BUILDCONS WATER ELECT

10,377.76 485.24 103.90 187.00 0 93.73
10,482.00 499.24 111.00 197.74 0 94.00
10,932.28 509.86 142.73 1,089.60 0 96.83
11,800.25 1,298.92 149.44 1,229.09 0 99.74
13,824.92 2,384.00 259.44 1,300.11 0 102.93
14,714.00 2,449.93 379.59 2,378.45 0 103.09
16,444.24 2,674.00 499.00 2,779.26 0 109.73
26,818.63 2,840.92 500.11 2,987.91 0 110.73
27,813.11 3,000.00 529.17 2,999.00 0 130.92
29,902.00 3,285.26 623.88 3,000.05 0 139.80
31,546.76 3,485.86 682.72 3,056.00 0 143.72
205,222.06 13,837.92 2,215.19 8,377.00 329.28 801.93
199,685.25 15,633.54 2,245.22 6,681.45 278.71 887.71
185,598.14 10,797.42 1,712.37 5,890.35 422.76 853.63
183,562.95 9,532.75 1,471.76 4,801.97 333.20 902.35
201,036.27 12,032.40 913.02 3,307.97 206.37 1,019.22
205,971.44 11,582.62 487.29 3,302.93 226.26 665.93
204,806.54 12,014.61 540.05 3,610.30 244.34 696.57
219,875.63 13,713.89 595.01 3,978.13 282.37 702.13
236,729.58 14,011.49 638.24 4,143.58 307.50 759.42
267,549.99 14,702.40 665.61 4,350.75 350.03 827.96
265,379.14 16,078.45 688.64 4,524.79 364.73 827.96
271,365.52 15,357.18 711.13 4,701.25 386.62 923.46
274,833.29 14,788.13 745.99 4,936.31 417.55 937.41
275,450.56 14,591.36 768.86 5,084.40 427.14 1,006.79
281,407.40 13,836.14 789.80 5,221.68 431.42 990.68
293,745.38 13,953.42 799.78 5,284.34 435.29 1,012.47
302,022.48 14,009.95 849.94 5,622.54 441.82 1,006.37
310,890.05 13,046.30 900.57 5,959.89 446.45 940.94
312,183.48 13,494.64 934.71 6,186.36 460.51 953.17
329,178.74 13,958.82 970.20 6,433.81 476.62 972.24
356,994.26 14,935.10 1,066.08 7,205.88 488.07 11,684.85
433,203.51 16,439.36 1,112.07 7,518.87 524.67 13,318.07
477,532.98 17,369.63 1,172.48 8,176.77 567.75 15,598.81
527,576.04 19,436.78 1,379.34 7,622.47 629.35 18,252.54
561,931.39 21,305.05 1,510.84 8,544.48 695.43 19,439.86
 72

595,931.39 23,305.87 1,666.09 9,654.79 771.33 20,344.44

634,251.14 25,535.50 1,878.47 10,912.56 855.59 21,301.04
672,202.55 27,806.76 2,118.26 12,338.83 948.76 22,035.93
718,977.33 29,990.92 2,374.20 13,816.34 1,045.41 22,682.77
776,332.21 32,260.63 2,660.94 15,454.02 1,152.07 23,353.71
834,161.83 34,711.31 2,966.52 17,348.90 1,269.33 24,066.66
 73

DATA PRESENTATION II

OBSERVATION INDUSTRIAL OUTPUT RGDP

1970 301.1 10,377.76
1971 333.12 10,482.00
1972 392.42 10,932.28
1973 441.51 11,800.25
1974 435.63 13,824.92
1975 490.00 14,714.00
1976 501.03 16,444.24
1977 573.11 26,818.63
1978 677.32 27,813.11
1979 712.00 29,902.00
1980 736.3 31,546.76
1981 25561.32 205,222.06
1982 25726.63 199,685.14
1983 19676.53 185,598.14
1984 17042.03 183,562.95
1985 17478.98 201,036.27
1986 16265.03 205,991.44
1987 17132.87 204,806.54
1988 19271.53 219,875.63
1989 19860.23 236,729.58
1990 20896.75 267,549.99
1991 22484.57 265,379.14
1992 22079.64 271,365.52
1993 21825.39 274,833,29
1994 21878.55 275,450.56
1995 21269.72 281,407.40
1996 21485.30 293,745.38
1997 21900.62 302,022.48
1998 21294.15 310,890.05
1999 22029.39 312,183.48
2000 22811.69 329,179.74
 74

2001 35379.98 356,994.26

2002 38913.04 433,203.51
2003 42885.44 477,532.98
2004 47320.48 527,576.04
2005 51495.66 561,931.39
2006 55742.52 595,821.61
2007 60483.16 634,251.14
2008 65248.54 672,202.55
2009 69909.64 718,977.33
2010 74881.37 776,332.21
2011 80362.72 834,161.83
2012 91223.80 901,221.62