IMPACT OF SELECTED MACROECONOMIC VARIABLES ON NON-OIL SECTOR DEVELOPMENT IN NIGERIA: THE ROLE OF QUALITY GOVERNANCE

Abstract

This study investigated the impact of selected macroeconomic variables on the performance of non-oil sector of manufacturing industries in Nigeria, together with the moderating role of quality governance on foreign direct investment. The autoregressive distributed lag technique was employed on a quarterly dataset from 2000Q1 to 2023Q4. The results submit first, that there are no long run relationships between the regressand and the regressors. This was further corroborated by the long run result which showed no discerning relationship between the variables in the model as revealed by the ARDL bound test. Second, government expenditure, real gross domestic product as well as real exchange rate all had significant impact on the concerned sector. While regulatory control, foreign direct investment (FDI) together with its interaction did not exert any meaningful impact on manufacturing sector’s productivity. The same report was seen for sectorial bank credit. Based on this, the study recommends amongst others, that government should create an investor-friendly environment by implementing strict compliance with growth engendered policies, reduce bureaucratic bottlenecks, and ensure policy stability. Targeted incentives, such as tax holidays or import duty waivers for manufacturing-related investments, can also help attract high-quality FDI in Nigeria.