Industrialization and Economic Growth in Nigeria

Abstract

This research investigated how industrialization and economic growth in Nigeria from 1980 to 2024 are related. This study utilized data sourced from the Central Bank of Nigeria Statistical Bulletin (2024) and the World Development Indicators (2024). These include yearly data for the subsequent variables: Gross Domestic Product acts as the dependent variable, with Industrial Sector Output, Mining Production, Electricity Supply to the Industrial Sector, and Government Capital Expenditure on Industry functioning as independent variables. The analysis employed the Auto-Regressive Distributed Lag (ARDL) model as the test statistic. The findings indicated that while the output of the industrial sector has a positive correlation with Nigeria's economic growth, this relationship is not significant. In contrast, mining production and government capital expenditure have negative correlations that are statistically significant. There is a positive and statistically significant correlation between electricity supply to the industrial sector and economic growth. The study concluded that while industrialization continues to be a key driver of economic transformation, the findings highlight structural weaknesses and ongoing inefficiencies in Nigeria’s industrial sector, mining industry, and public investment framework. It was suggested that the government should bolster its efforts to improve electricity supply for better industrial productivity; guarantee transparency and efficiency in capital spending to yield growth-promoting results; foster industrial capacity utilization and technological advancement; and reform the mining sector to enhance value addition and encourage sustained economic growth