Impact of Industrial Sector on Economic Growth in Nigeria (1981–2020)

One of the challenges facing the country today is how to improve the industrial sector and increase the level of economic growth. Addressing this challenge seems to be difficult despite all efforts by the government both present, and past to salvage the situation. Against this backdrop, the main objective of the study is to examine the impact of industrial sector on economic growth in Nigeria from 1981-2020. The variables used were real gross domestic product as the dependent variable while industrial sector output, agricultural sector output, inflation rate, foreign direct investment, trade openness, and exchange rate are the independent variables. The Ordinary Least Squares (OLS) estimation technique was used in estimating the values of the parameters. The regression result showed that industrial sector output has positive relationship with economic growth, industrial sector output has no significant impact on economic growth in Nigeria, and that there is a uni-directional causality relationship flowing from RGDP to IDO between industrial sector output and economic growth in Nigeria. Based on the findings of the study, the study recommends among others that one of the biggest obstacles for the development of the industrial sector is the issue of electricity. Therefore, improving Nigeria’s electricity generating capacity will be an important driver of industrial growth and development. The government should improve investments other sources electricity generation like solar energy and wind energy