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Policy Reversal and its Implication on the Economic Growth of Nigeria: A study of the Nigerian manufacturing sector.

Authors: NNEOMA amos , AJIKE Emmanuel , & AKINLABI Babatunde

Publication Type: Journal article

Journal: Epra International Journal Of Economic And Business Review

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Abstract

Policy reversals have taken a big toll on the economic development of most nations especially Nigeria. Investment friendly reforms typically raise expected returns, but may also increase uncertainty if the investors believe that the reforms could be reversed. This paper investigates the effect of policy reversals on the economic growth of the nation using the manufacturing sector as a case. The data necessary for this study were obtained from secondary sources (CBN Statistical Bulletin and Nigerian Bureau of Statistics). The variables utilized from these bulletins are manufacturing sector output, the exchange rate, the inflation rate and the interest rate. A co-integration test was performed on these variables to determine the long-run relationship between the variables. The results of unit root suggest that all the variables in the model are stationary and the results of Causality suggest that exchange rate and interest rate cause MOS and not MOS caussing exchange rate and interest rate. The result a one-way causation running from exchange rate and interest rate to MSO. The Johansen cointegration result shows that despite no causation between exchange rate and interest rate, but there is still existed 1 cointegrating equation, implying the existence of long run relationship between policy reversals and economic development in Nigeria. The result also revealed significant positive relationship between exchange and interest rates with economic growth. The result indicated that policy reversals have negatively affected the manufacturing sector which has in turn adversely affected the economic growth of the nation. Therefore, it is recommended that for the manufacturing sector to perform at optimum level, the level of reversals in some basic economic indicators such as interest rate, exchange rate and inflationary rate should be reduced and controlled to the bearest minimum.

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,N. AJIKE,E. AKINLABI,B. . (2014). Policy Reversal and its Implication on the Economic Growth of Nigeria: A study of the Nigerian manufacturing sector., 2 (), 11-11.

,N. AJIKE,E. AKINLABI,B. . "Policy Reversal and its Implication on the Economic Growth of Nigeria: A study of the Nigerian manufacturing sector." 2, no (), (2014): 11-11.

,N. and AJIKE,E. and AKINLABI,B. and . (2014). Policy Reversal and its Implication on the Economic Growth of Nigeria: A study of the Nigerian manufacturing sector., 2 (), pp11-11.

N, AJIKEE, AKINLABIB, . Policy Reversal and its Implication on the Economic Growth of Nigeria: A study of the Nigerian manufacturing sector.. 2014, 2 ():11-11.

,NNEOMA amos , AJIKE,Emmanuel , and AKINLABI,Babatunde . "Policy Reversal and its Implication on the Economic Growth of Nigeria: A study of the Nigerian manufacturing sector.", 2 . (2014) : 11-11.

[1] .NNEOMA amos A.Emmanuel & A.Babatunde , "Policy Reversal and its Implication on the Economic Growth of Nigeria: A study of the Nigerian manufacturing sector." vol.2, no., pp. 11-11, 2014.

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