The Impact of Productivity, Employment, Sales Volume With and Without Completely Knocked Down in Automotive Industry on Economic Growth in Nigeria: 1987-2019

Abstract

This study investigated the impact of Productivity, Employment Creation, Sales Volume and CKD in Automotive Industry in Nigeria using time series data for 1987 to 2019. Unit root test was conducted, the result showed mixed order of integration i.e I(0) and I(1) which informs the use of Autoregressive Distributed Lag Model (ARDL) technique of analysis. The findings and conclusion from the study revealed that employment, productivity, sales volume and completely knocked down in automotive industry are all positive and significant. These immensely contribute to the economic growth in Nigeria. This attests to the fact that Government needs to allow only the importation of CKD and ban SKD to increase productivity thereby generating increase in employment. This invariably increases standard of living and boosting sales volume with reduction in average unit cost. The multiplier effects will also boost productivities of allied industries’ products and services such as iron and steel, rubber, plastics, electrical equipment, road construction, transportation, urban and rural development. So, government needs to be serious to establish Vehicle Finance Scheme where no one needs to put down 100% cash to own a vehicle. Government should therefore encourage importation of Completely Knocked Down rather than Semi Knocked Down.

Keywords: Economic Growth (RGDP), Productivity (OUT), Employment Creation (EMP), Sales Volume (SAV), Completely Knocked Down (CKD), Semi knocked Down (SKD) and Automotive Industry

DOI: 10.7176/JESD/11-20-07

Publication date:October 31^st 2020