A review and measurement of capacity utilisation in the Nigerian economy

Purpose – The purpose of this paper is to examine the issue of capacity utilisation (CU) in the Nigerian economy over the last 12 years (1991-2003) with the view to determining if there has been significant improvement in CU despite changes in government policies initiated to boost the productive capacity level. Design/methodology/approach – The methodology is basically descriptive and analytical. Planned and systematic collection, analysis and interpretation of secondary data are adopted to explain CU situation in Nigeria. Findings – The paper shows that CU trends in Nigeria from 1993-2003 ranges between 30 and 60 per cent. Practical implications – The government and organised private sector organisations have a monumental role to play for positive changes and sustainable improvement of CU level in Nigeria through boosting aggregate demand, improved employment, low interest rate, improved export drive, cheap fuel and power supply, creation of enabling environment for businesses. Originality/value – The results of this paper support the finance-economics view that the relatively low level of CU across the sectors analysed suggests that firms in Nigeria are subject to economic constraints.