Effect of Monetary Policy on Manufacturing Sector Performance in Nigeria: An ARDL Approach (1981-2023)

Apinoko Raphael and Wanogho Owegbe Akpughe
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Apinoko Raphael: Department of Business Administration and Management, Federal Polytechnic, Orogun, Delta State, Nigeria.
Wanogho Owegbe Akpughe: Department of Accountancy, Federal Polytechnic, Orogun, Delta State, Nigeria.

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Abstract: This study investigated the influence of monetary policy on manufacturing sector performance in Nigeria, the study spanned from 1981 to 2023. Specifically, the study examine the effect of money supply, inflation rate and credit to private sector on manufacturing sector performance (measured using manufacturing sub-sector gross domestic product growth rate). The study utilized secondary data collected from the Central Bank of Nigeria (CBN) Statistical Bulletin (various issues). The study used econometric techniques of Augmented Dickey-Fuller (ADF), bound test and autoregressive distributed lag (ARDL) for empirical analysis. The study found that unit root suggested that inflation is stationary while manufacturing sector output, money supply, and credit to private sector are non-stationary of order one. The bound test result found that there is a long-run equilibrium relationship between the utilized variables in the study the autoregressive distributed lag (ARDL) result revealed that money supply had negative and insignificant influence on manufacturing sector performance in the long run, but it has positive impact on manufacturing sector growth in the short run. while Inflation show a negative and insignificant effect on the Nigerian manufacturing sector in the long run. the ARDL also found that credit to private sector is positive and significant impact on manufacturing sector performance in the long run. This study concluded that monetary policy is a short-term instrument for improving growth in the manufacturing sector in Nigeria. Hence, the study recommended that government should exploit other means of policy that can shed better light on effectiveness of monetary policy in Nigeria to enable manufacturing sector experience increase in output that will engender economic growth.

Date: 2026-03-18
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Published in Asian Journal of Economics, Finance and Management , 2026, 8 (1), pp.266-282

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