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Manufacturing sector performance in Africa: The role of monetary policy instruments

Kayode Akinyemi (), Isaac Ogbuji and Sunday Adedokun
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Isaac Ogbuji: Department of Finance, University of Lagos, Nigeria.
Sunday Adedokun: Department of Economics, University of Lagos, Lagos, Nigeria.

BizEcons Quarterly, 2018, vol. 3, 27-35

Abstract: This scientific enquiry investigates the effect of monetary policy instruments on manufacturing performance in twenty African countries over the period of 1997-2016. We use static panel analysis and the results show that liquidity ratio and money supply positively and significantly impact manufacturing output. Lending rate negatively but significantly affects manufacturing output which also conforms to a priori expectation. The positive and significant effect of exchange rate on manufacturing output indicates that the higher the exchange rate the higher the manufacturing output. The study also finds that interest rate negatively impacts manufacturing output. Hence, African countries should endeavor to strengthen their monetary authorities and be dynamic in their monetary policy to effectively control supply of money and reduce lending rate.

Keywords: Monetary Policy; Manufacturing Output; Money Supply; Lending Rate (search for similar items in EconPapers)
JEL-codes: E43 E51 N67 (search for similar items in EconPapers)
Date: 2018
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