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ADVANCING ECONOMIC GROWTH IN NIGERIA THROUGH SECTORAL DIVERSIFICATION: THE IMPACT OF MANUFACTURING AND AGRICULTURE


Sr No:
Page No: 24-33
Language: English
Authors: Ndubuisi Eme Uguru*, Dimoji Favour Amarachi
Received: 2025-06-04
Accepted: 2025-06-19
Published Date: 2025-06-23
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Abstract:
Nigeria's economic development has long been constrained by its overdependence on crude oil exports, resulting in persistent macroeconomic instability, high unemployment, sluggish industrial growth, and vulnerability to global oil price fluctuations. This study examines the role of the agricultural and manufacturing sectors in promoting economic diversification and development in Nigeria, using annual time series data from 1981 to 2023. The quantile regression approach is employed to evaluate the differential impacts of sectoral outputs on economic performance across various GDP levels, offering deeper insights beyond mean-based estimations. The results indicate that Agricultural sector output (ASO) has a positive and statistically significant impact on GDP at the 1% level, indicating that growth in agriculture supports overall economic development and diversification in Nigeria. Manufacturing sector output (MSO) also shows a positive and significant relationship with GDP at the 5% level, highlighting the important role of manufacturing in driving economic growth and structural transformation. Interest rates (INT) have a negative and statistically significant effect on GDP, suggesting that higher borrowing costs discourage investment and consumption, thereby hindering economic growth. The quantile process indicates that the impact of agricultural output (ASO) varies across income quantiles: it is insignificant at lower quantiles (0.10 and 0.25), but becomes positive and significant at the median (0.50) and upper-middle quantile (0.75), with a diminishing effect at the highest quantile (0.90). Interest rates (INT) consistently show a negative effect across all quantiles, but are only statistically significant at the median quantile (0.50), implying the strongest adverse impact on economic growth occurs around the middle income levels. Manufacturing output (MSO) positively influences GDP across all quantiles, though insignificant at the lowest quantiles (0.10 and 0.25). Its effect is significant and strongest at higher quantiles (0.75 and 0.90), indicating manufacturing becomes more crucial for economic growth in more advanced income segments. The Wald test for symmetry indicates no evidence of asymmetry in the relationships. The study recommends that Government should prioritize agro-processing and digital innovation sectors through targeted incentives, as this showed significant growth in gross domestic product over the years under review.
Keywords: Economic diversification, manufacturing and agricultural sectors.

Journal: MRS Journal of Accounting and Business Management
ISSN(Online): 3049-1460
Publisher: MRS Publisher
Frequency: Monthly
Language: English

ADVANCING ECONOMIC GROWTH IN NIGERIA THROUGH SECTORAL DIVERSIFICATION: THE IMPACT OF MANUFACTURING AND AGRICULTURE