EFFECT OF EXCHANGE RATE ON MANUFACTURING INDUSTRIES IN NIGERIA (ECONOMICS PROJECT TOPICS AND MATERIALS)
CHAPTER ONE
INTRODUCTION
1.0 BACKGROUND OF THE STUDY
Industrialization offers dynamic contribution to the restructuring of a less developed economy from a traditional to a more advanced state investment towards development. In 1986, the world oil market witnessed turbulence with a fall in prices and since them the economy has been dependent and largely vulnerable to external disequilibrium. The Nigerian manufacturing sector was then clipped by and large with instability in production targets, capacity utilization and revenue generation, three after, unemployment, inflation and all other economic and social problems triggered off (Atitebi 1992).
Giwa (1996) in his writing “thoughts on the Nigeria economy. Stipulated that the manufacturing industries in Nigeria had been majority characterized by low productivity in output production and the sector’s (manufacturing industries) contribution to the Gross Domestic Product (GDP) of Nigeria has been relatively low over the years. The low output production and the low contribution of the sector to the Gross Domestic Product (GDP) was largely due to the exchange rate instability caused by the changing exchange rate policy runned by the Nigeria government as at then. In his further investigation on how the rate of exchange affects the output production of manufacturing industries in Nigeria, Giwa stated categorically that the instability in the exchange rate affects the output production of manufacturing industries as a result of the fact that most of the manufacturing industries in Nigeria largely depended on imported raw materials for the production of their output. Industrial production, in its entire sectors including manufacturing, mining and electricity fell to a record low from 122.1% in 1987 to 118.1% by the fourth quarter of 1994.
