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The efficacy of currency devaluation to improve output in Nigeria is under debate, and coupled with an unsatisfactory result in the behaviour of the manufacturing sector performance regenerated interest of this study to investigate the impact of exchange rate on output and employment in the sector. The work uses Structural Vector Autoregression, EC...
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... Industrialization serves as a catalyst for structural transformation and diversification of the economy, allowing a nation to fully use its factor endowment and become less reliant on imported raw materials and finished products for economic growth, development, and sustainability. A thriving manufacturing sector has been proposed as the ideal industry to drive Africa's development because it provides opportunities for increased availability of manufactured goods, a vehicle for increased production of goods and services, increased employment, increased efficiency, increased incomes, and improved balance of payments (Emerenini & Ajudua, 2014). ...
In this paper, the influence of fiscal policy (government expenditure and taxation) and interest rate on the manufacturing sector of the Nigerian economy was explored for the period 1981 to 2021. The study utilized the autoregressive distributed lag (ARDL) model approach since some of our variables were integrated at level and others at first difference, and the bounds test reporting the existence of long run relationship in the model. Findings of the study indicated that in the short run, government expenditure and its one-period lag exerted a negative and significant influence on manufacturing sector performance; value added tax exerted a positive and significant effect on manufacturing sector performance while its one-period lag exerted a negative and significant effect; and interest rate exerted a positive and significant effect on manufacturing sector performance. In the long run, government expenditure put forth a negative but insignificant effect on manufacturing sector performance; while value added tax and interest rate exert positive and significant effect. In the disaggregated model, recurrent expenditure exerts a negative and significant effect; capital expenditure exerted a positive and significant effect; value added tax exerted a negative and significant effect; and interest rate put forth a positive and significant influence on manufacturing sector performance. The study recommended that there is need for a reduction in the cost of governance as a huge proportion of public spending is used in running the government other than being utilized in stirring critical sectors that could stir manufacturing sector performance.
... This same phenomenon consists of seeking autonomy to monetary and exchange rate policy changes, consisting of a greater flow of capital in the private sector and the increase of a moderate inflation rate (Asaleye et al., 2021;Rosende, 2002). ...
Various events can affect a country's exchange rate. In the period between 2020 and 2021, Peru experienced the severe effects of the COVID-19 pandemic, as well as political instability. This article has two objectives: first, to explore what was the average monthly exchange rate (sale) in Peru between January 2020 and December 2021; second, to determine if there is any significant trend in the data shown for that period. The research presented a quantitative approach, descriptive level, non-experimental design and retrospective cross-sectional cut. The technique was documentary review and the instrument was the registration form. The data provided by the Central Reserve Bank of Peru (Monthly average bank exchange rate -sale-) were explored. As a result, it was found that the lowest value was recorded in January 2020 (S/3,329), while the highest value was recorded in September 2021 (S/4,111). In addition, the result of the Mann-Kendall trend statistical test resulted in a p. value of < 0.0001, thus there is a significant trend in the average monthly exchange rate (sale) in Peru between January 2020 and December 2021. Received: 21 February 2023 / Accepted: 23 July 2023 / Published: 5 September 2023
... Exports and inflation had a positive relationship with manufacturing performance. Asaleye et al (2021) investigated the effect of exchange rate on manufacturing performance in Nigeria. The study employed Structural Vector Auto regression (SVAR), ECM and Canonical Co-Integrating regression to examine the shock effect, short and long-run elasticities of exchange rate on the manufacturing performance.While employment and output were used as a proxy for manufacturing sector performance. ...
This study examined the impact of exchange rates on the performance of the manufacturing sector in Nigeria between 1990 and 2020. Using canonical cointegrating regression (CCR) framework, the result obtained showed that exchange rate devaluation constrains manufacturing sector while exchange rate fluctuation hampers manufacturing output. The study indicated that price increase leads to decline in the manufacturing sector, the study recommends among other things the need to formulate policies that align with the exchange rate to the actual needs of the manufacturing sector. The study further suggests that change in exchange rate management strategy should be allowed to run a reasonable course of time. Jettisoning strategies at will and on frequent basis has implication for exchange rate and obvious consequence for a sector that depends on foreign inputs
... However, the finding is consistent with the studies of Habibur and Ismail (2003). Ayinde (2014), Iddrisu et al. (2015), and Adebanjo et al. (2019). The negative effect of the exchange rate on industrial performance means that the present period in Nigeria has seen a fall in industrial production due to an increase in the exchange rate over the previous era. ...
This study examines the impact of cross-border investments, which comprised of foreign direct investment (FDI) and foreign portfolio investment (FPI) on industrial performance in Nigeria using time series data for the period 1988-2020 sourced from the World Bank. The study adopted Augmented Dickey-Fuller (ADF) test, co-integration techniques, Granger causality test, and Error Correction Model (ECM) as methods of data analysis. The findings of the study revealed that FDI had a weak negative effect on industrial development in Nigeria while FPI had a positive significant effect on industrial performance. The study also revealed that the exchange rate had a weak negative effect on industrial performance. The study, therefore, recommends that the government of Nigeria should employ tax incentives to discourage the repatriation of profits (earnings) by foreign investors and strengthen the quality of education to boost human capital in order to realize the positive spillover effects of technology and capital transfer by foreign investors. It also recommends that the demand for foreign currency should be reduced by placing an embargo on imported raw material and used items from abroad among others as well as developing the agriculture and manufacturing sector to produce imported items and more export-oriented to generate greater foreign earnings to sustain the stability of the naira.
... However, Nigeria has increased the number of universities in the country in recent times with the private sector's involvement in the educational sector. Consequently, government expenditure on education has discouraged investment through the public sector ( Asaleye, Maimako, Inegbedion, Lawal & Ogundipe, 2021;Obadiaru, Oloyede, Omankhanlen, & Asaleye, 2018). For example, between 1970 and 2018, Nigeria's contribution to education was less than 26% of Gross Domestic Product (GDP) (Asaleye, Ogunjobi, & Ezenwoke, 2021), which is also below the UNESCO minimum level of 26%. ...
Many studies have documented that human capital formation is important to boost output both empirically and theoretically. However, studies on the implications of human capital on employment are still scanty, especially for developing countries. Against this background, the study investigates the shock and long-run implications of government financing on education and health on output and employment in Nigeria using a vector error correction model (VECM). The results show that the forecasting error shocks from government expenditure on health and education affect output more than employment along the 10-horizon period. Evidence from the long-run output model showed that government expenditure on education and human capital index is statistically significant, while government expenditure on health is not statistically significant. Government expenditure on education and the human capital index has a positive relationship with output. For the long-run employment model, government expenditure on health and education is statistically significant; while investment in human capital is not significant with employment. Government expenditure on education has a negative relationship with employment, while a positive relationship exists between government expenditure on health and employment. The result implies that human capital indicators in terms of quantity and quality do not contribute positively and significantly to employment growth in Nigeria. The study recommends the need to encourage self-reliance through entrepreneurship training to bolster employment opportunities in the long run.
... the finding of the study is in line with the result of Otokini, et al (2016) which found positive influence of exchange rate depreciation on manufacturing sector output in Nigeria. However, the finding of the study with respect to exchange rate contradicts the finding ofAyinde (2014) which found negative effect of exchange on manufacturing sector output performance in Nigeria. The difference in result could be attributed to measures of exchange rate used. ...
No country is an island. The globalization phenomenon is making all countries to be interdependent. The external sector environment has become critical for the success of every country and internal balance. Thus, it has become important to examine how much the externa sector environment impact on the performance of the domestic economy. The present study, therefore, examined the influence of Nigerian external sector environment on the performance of the Nigerian manufacturing sector between 1981 and 2019. The study adopted exp-post research design approach and the Autoregressive Distributed Lag (ARDL) model estimation techniques. The empirical model consists of the Nigerian manufacturing sector output index as the dependent variable and exchange rate, trade openness, and foreign direct investment as independent variables and external sector environment variables. Test of unit root results indicated that the variables have mix order of integration, while the co integration analysis results indicated that the variables in the model have stable long run relationship. Estimate of the ARDL model reveals that in the short run exchange rate variations have negative, but significant effect on manufacturing sector performance, while trade openness, and FDI have positive but insignificant influence on the manufacturing sector performance in the short run. In the long run, exchange rate level and FDI inflows have positive and significant effect on the manufacturing sector performance, while trade openness has negative and significant effect on the Nigerian manufacturing sector performance. The study therefore conclude that the Nigerian external sector Environment has significant influence on the performance of the Nigerian manufacturing sector.
... Nigerian government should also encourage manufacturing activities especially the manufacturing of export, so as to encourage appreciation of value of Naira against foreign currencies especially the US dollar. Asaleye, Maimako, Inegbedion, Adedoyin, and Adeyemi, (2021) [4] investigate the impact of exchange rate on manufacturing performance in Nigeria. The study examines impact of employment in the manufacturing sector (MEMP), credit of private sector (MCAP), interest rate (INTR), exchange rate (EXCR) and trade openness in the manufacturing sector (MROP) on manufacturing performance in Nigeria. ...
This study is conducted to examine the effect of exchange rates on performance of Dangote cement manufacturing company. The specific objectives are to: (i) determine the effect of exchange rates volatility on return on equity of Dangote cement manufacturing company, and (ii) examine the effect of interest rate on return on equity of Dangote cement manufacturing company. The methods of data analysis range from Argument dickey-fuller unit root test, Johansen co-integration test and finally error correction method. The summary of the findings is: foreign exchange rate has negative significant impact on return on equity output in Nigeria (t-statistics (3.5663) > t0.05 (1.684). foreign exchange rate has 52 percent negative significant impact on return on equity output in Nigeria. A percent change in foreign exchange rate result to 52 percent decrease in return on equity output in Nigeria; Interest rate has negative insignificant impact on return on equity output in Nigeria (t-statistics (-1.2746) < t0.05 (1.684), interest rate has 25 percent negative insignificant impact on return on equity output in Nigeria. A percent change in interest rate result to 25 percent decrease in return on equity output in Nigeria, and Foreign direct investment has positive significant impact on return on equity output in Nigeria (t-statistics (6.0022) > t0.05 (1.684), foreign direct investment has 11 percent positive significant impact on return on equity output in Nigeria. A percent change in foreign direct investment result to 11 percent increase in return on equity output in Nigeria. The study concluded that there is significant effect of exchange rates on performance of Dangote cement manufacturing company. The study recommends that Nigerian monetary authority or CBN should make the monitoring of exchange rate system a priority since it explains high proportion of variation in Nigerian manufacturing output. Introduction Exchange rate is a prominent determinant of Nigerian manufacturing activities and world trade, receiving much attention in the context of national and global imbalances. It is obvious fact that the Nigerian manufacturing sector highly import dependent for input factors and as such, must be mindful of the exchange rate system that governs import and export activities. The subject of exchange rate movement and volatility came to be burning issues in Nigeria because of the interest of every economy to have a stable rate of exchange with its trading partners (Uruakpa, Okorontah & Ede, 2021) [31]. Exchange rate is the price of one currency in terms of another currency (Fagbemi, 2006) [12] and government are exceptional interest in price of exchange between two or more countries. Choosing the right exchange rate or maintaining relative stability in exchange rate is essential for both internal and external balances and economic growth in the long run. Insufficient management of the exchange rate causes distortions in the patterns of consumption and manufacturing (Mordi, 2006) [22]. Similarly, excessive fluctuation in exchange rate creates uncertainty and risks for manufacturing agents with destabilizing effect on the macro-economy. Private sector operators in manufacturing activities are concerned with exchange rate fluctuation and the volatility because of its impacts on their portfolios which may result in capital losses (Mordi, 2006) [22]. Export volume depicts quantity of goods that domestic market would not clear and also denotes surplus quantity of domestic output from different industrial sectors that is gazette to earn foreign exchange. Export volume in any sector also reported in a country element of domestic full or near full employment of capital, labour and labour efficiency in that sector. In support of this statement, Lages and Montgomery, (2014) [19] asserts that export performance is of paramount importance because it
... According to our results, the B Corp model is based on social and economic factors that reduce market centrality, especially when combined with market centrality, especially when combined with ecological and business as well as ecological and social dimensions. As a first approach to the phenomenon under study, we were able to understand that companies have become aware of the impacts associated with their products and services, which have been motivation to belong to this type of companies [103,104]. In this way, B Corps were channeled in the interviews with leaders with certified B companies dedicated to responsible tourism, verifying that B Corps generally change in their practice environments while undergoing evaluation processes and reevaluation processes to achieve certification. ...
One of the particularities of companies with a social purpose is that, through their business model of B companies, they have incorporated into their processes the necessary mechanisms to obtain, simultaneously, the profits to ensure the existence of the organization in the market. At the same time, social value is generated, which is necessary to address the problems of the social crisis caused by COVID-19 and the environmental problems affecting the community. The current global health and economic crisis has opened up the possibility of adopting business model B and focusing more on the individual. Based on the grounded theory method, we have examined 3500 B Corporations in Latin America, of which 57 were examined in 10 countries listed in the Directory of B Corporations for Latin America. The main conclusions are that B Corporations dedicated to tourism through responsible entrepreneurship develop a more inclusive, sustainable and environmentally friendly economy for the benefit of society, go beyond the notion of CSR and move away from traditional business, as B Corporations combine social development and economic growth.
... Exchange rate, the value of a country's currency in relation to another is an asset price and an important exogenous variable that determines the movement of other variables all centered on macroeconomic stability and resource flow in and out of a country (Emerenini & Ajudua, 2014). The importance of exchange rate cannot be overemphasized as it plays a key role in international trade by allowing for the comparison of prices of goods and services produced in different countries. ...
... Hence, while government are interested in its stability, household and firms are also keen on its stability as they use exchange rates in businesses and personal transaction by converting foreign price into domestic currency. This has led to a continuous clamour for a functional policy framework and management of exchange rate which will aid in the ease and efficient generation of revenue, enhanced expenditure inflow and outflow with regards assets, goods and services etc. without of this, a country run the risk of a balance of trade or payment problems (Emerenini & Ajudua, 2014). ...
... In Nigeria, foreign exchange was brought about by several factors which among others include a structural shift in production, changing pattern of international trade, institutional changes in the economy etc (Emerenini & Ajudua, 2014). A continuous variation in the exchange rate since 1960 had pervasive effects on the Nigerian economy and thus led to macroeconomic reforms with the monetary authorities trying out series of exchange rate strategies. ...
The study investigated exchange rate and its impact on export performance in Nigeria. Using secondary data spanning from 1986 – 2018, the study adopted the Error Correction Mechanism (ECM) and employed export as the dependent variable while foreign exchange rate, inflation rate, interest rate, gross capital formation as independent variables. The unit root test to ascertain the stationarity level of variables and the Johansen Cointegration testto check for long run relationship between variables were employed. Findings from the result showed that exchange rate had a significant and negative relationship with export performance in Nigeria both in the short and long run. The study therefore, recommends that exchange rate should be closely monitor and managed given the implications of its movements on exports. Also, government should propose and implement policies that will stabilise the exchange rate as this will help in the reduction of undesirable impact of exchange rate fluctuations on export performance.
Keywords: Exchange Rate; Export; Unit Root Test; ECM
JEL Classification: C5, F10, F311.
... The study therefore concludes that the manufacturing sector plays a pivotal role in the economic development of the country. Ayinde (2014) investigated the impact of exchange rate volatility on the performance of manufacturing firms in Nigeria using quarterly data for the period spanning from 1986 to 2012. The study employed Generalized Autoregressive Conditional Heteroscedasticity (GARCH) estimation technique. ...
In this paper, the purpose was to investigate the extent to which trade policy impact on industrial sector
performance in Nigeria within the period of 1970 to 2014. Particularly, the study was carried out using ARDL
bounds testing approach. It was observed that the trade policy variables of exchange rate, trade openness and tariff
significantly impact on industrial sector performance. Specifically, exchange rate and tariff have negative and
significant impact on manufacturing sub-sector and industrial sector performance in Nigeria. On the other hand,
trade openness has a significantly positive effect on industrial sector growth. On the basis of these findings, the
study suggested the implementation of appropriate exchange rate and tariff policies that will promote industrial
activities as well as protect domestic firms from external competition. Emphatically, moderate tariff on importation
of raw materials and machineries should be adopted and enforced.
