Foreign Exchange and Industrial Sector Growth in Nigeria (1981-2015)

Abstract

The study is on foreign exchange and industrial sector growth in Nigeria. Secondary data on industrial output, foreign exchange disbursement, foreign exchange rate and Nigeria foreign reserves 1981 -2015 were collected from the Central Bank of Nigeria Statistical Bulletin, 2015 edition.  The E-view version 9 Econometric program was used to run a regression on the data collected. Foreign exchange availability (proxied by foreign exchange disbursement) was found to have no significant but positive influence on the Nigeria industrial sector growth. While foreign exchange rate and Nigeria foreign reserves were found to have positive and significant influence on the growth of Nigeria’s industrial sector. It is recommended that the Nigerian government should take urgent steps to tackle the foreign exchange crisis and maintain a sustainable exchange rate. The government should also ensure that foreign exchange available to importers of industrial inputs and at the same time grow the country’s foreign exchange reserves.

Keywords: Foreign Exchange, Industrial Sector, Exchange Rate, Foreign Reserves, Industrial inputs.