IIARD International Institute of Academic Research and Development

INTERNATIONAL JOURNAL OF SOCIAL SCIENCES AND MANAGEMENT RESEARCH (IJSSMR )

E-ISSN 2545-5303
P-ISSN 2695-2203
VOL. 11 NO. 1 2025
DOI: 10.56201/ijssmr.vol.11no1.2025.pg.357.368

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Fiscal Policy and the Manufacturing Sector Performance: Effect on Economic Growth

Joseph Olufemi OGUNJOBI , Omowonuola Fadekemi OLUGA, Olorunshogo Adeleke OYENIYI, Olufemi Adebayo OLADIPO

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Abstract

This study examines the impact of the labour market and the manufacturing sector on Nigeria's economic growth from 1993 to 2023. Employing the Solow-Swan growth model and Dynamic Ordinary Least Square (DOLS) analysis, the study investigates the relationship between economic growth and key variables such as labour market participation, manufacturing output, gross fixed capital formation, inflation, and interest rates. The findings reveal that the labour market, manufacturing output, and gross fixed capital formation positively and significantly influence Nigeria's real GDP, indicating their pivotal roles in driving economic growth. Conversely, inflation and interest rates exhibit a negative but significant effect on economic growth. The study highlights the need for targeted policies to enhance workforce skills, increase credit accessibility for small and medium-sized enterprises, and foster public-private sector collaborations to boost manufacturing and economic growth. These insights provide valuable recommendations for policymakers aiming to achieve sustainable economic development in Nigeria.

keywords:

Fiscal policy, manufacturing sector, labour market, economic growth.

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