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The Impact of Economic Liberalization Policy on Performance of the Nigerian Industrial Sector - L’impatto della politica di liberalizzazione economica sulla performance del settore industriale in Nigeria

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Abstract
This study examined the impact of economic liberalization policy on performance of the Nigerian industrial sector. Annual data were sourced from the Central Bank of Nigeria Statistical Bulletin and Annual Reports and interpolated to quarterly data. The variables of interest were index of aggregate industrial production, manufacturing production, mining and quarrying production, electricity consumption, energy consumption, population growth, trade openness, financial deepening, and liberalization dummy variable. Unit root test results showed that although some of the variables were trend stationary they all became stationary after differencing once, I(1). The Engel – Granger test results showed the existence of a meaningful long-run relationship among the variables. The empirical results showed that the impact of economic liberalization policy on performance of the Nigerian manufacturing, mining and quarrying, and power subsectors and the aggregate industrial sector is mixed and statistically significant. Periods with economic liberalization policy, 1986Q3-2012Q4 performed differently from periods before economic liberalization policy. The study concluded that the policy change that took place in 1986Q3 and continuous government efforts to further open the economy to the rest of the world has significantly shaped the Nigerian industrial landscape but much is still needed to be done for Nigeria to benefit from the ongoing liberalization process. The study recommends that government should invest heavily on human capital development as a precursor to benefiting from the ongoing economic liberalization policy. - Questo studio esamina l’impatto sul settore industriale nigeriano della politica di liberalizzazione economica. Sono stati utilizzati dati annuali, forniti dal Bollettino statistico e dal Rapporto annuale della Banca Centrale nigeriana, poi incrociati con dati trimestrali. Le variabili prese in considerazione sono l’indice della produzione industriale aggregata, la produzione del settore manifatturiero, la produzione del settore minerario ed estrattivo, i consumi elettrici, i consumi energetici, la crescita demografica, l’apertura del commercio, la profondità finanziaria e la liberalizzazione. I test a radice unitaria hanno mostrato che sebbene alcune variabili fossero tendenzialmente stazionarie, tutte lo sono diventate dopo la differenziazione di I(1). I test di Engel e Granger hanno evidenziato l’esistenza di una significativa relazione di lungo periodo tra le variabili. I risultati empirici hanno mostrato che l’impatto della politica di liberalizzazione economica sull’andamento del settore manifatturiero, minerario ed estrattivo, dei sotto-settori energetici e del settore industriale aggregato è variegato ma statisticamente significativo. Nei periodi di liberalizzazione economica, terzo trimestre 1986/quarto trimestre 2012, l’andamento dell’economia è stato diverso da quello realizzatosi prima di queste politiche. Lo studio conclude che i cambiamenti di politica economica che hanno avuto luogo nel terzo trimestre del 1986 e i continui sforzi del governo per aprire ulteriormente l’economia della Nigeria al resto del mondo hanno avuto una certa influenza sulla struttura del settore industriale, anche se occorre ancora fare molto affinché il paese tragga consistenti benefici dal processo di liberalizzazione in corso. L’indicazione emergente da questo studio è che risulta necessario investire ancora fortemente sullo sviluppo del capitale umano affinché si possa beneficiare delle politiche di liberalizzazione del paese.

Suggested Citation

  • Karimo, Tamarauntari M., 2015. "The Impact of Economic Liberalization Policy on Performance of the Nigerian Industrial Sector - L’impatto della politica di liberalizzazione economica sulla performance del settore industriale in Nige," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 68(2), pages 229-257.
    • Handle: RePEc:ris:ecoint:0753
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    References listed on IDEAS

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    9. Saibu M O, 2011. "Sectoral Output Responses to Trade Openness, Oil Price and Policy Shocks in Nigeria: A CVAR Approach," Journal of Social and Development Sciences, AMH International, vol. 1(2), pages 48-59.
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    11. World Bank, 2012. "The World Bank Annual Report 2012," World Bank Publications - Books, The World Bank Group, number 11844.
    12. Tomola M. Obamuyi & Sola Olorunfemi, 2011. "Financial reforms, interest rate behaviour and economic growth in Nigeria," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 1(4), pages 1-2.
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    More about this item

    Keywords

    Economic Liberalization; Industrial Sector; Nigeria; Performance;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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