Bank Lending, Economic Growth and Manufacturing Sector Performance in Nigeria: 1981-2020

  • Ojo Rufus Olawumi
  • Sola Ogungbenle
Keywords: Interest Rate, Inflation Rate, Exchange Rate, Gross Domestic Product, Manufacturing Output


Despite several government policies to stabilize the manufacturing sector in Nigeria, lots of challenges have continued to bedevil the sector unabated. It is on this basis the study is carried out to examine the nexus between bank lending, economic growth and manufacturing sector performance in Nigeria. The secondary data which spanned through 1981 and 2019 were collected from the Central Bank of Nigeria. The study, due to the strong evidence of long run relationship among the variables, conducted ARDL model to determine the nature of the relationship between the variables. Cointegration test was carried out using ARDL Bounds Test approach to cointegration. The study concluded that interest rate and inflation rate has no significant impact on manufacturing sector output in Nigeria, while commercial bank total loan has a significant impact on manufacturing sector output in Nigeria. The study found evidence of cointegration among the variables. The results implied the presence of cointegrating vectors of long run equilibrium relationships among the variables of interest. Based on the findings, the study recommended among others that the Central Bank of Nigeria in collaboration with other monetary authorities should reduce the interest rate being charged on loans from the commercial banks through the reduction of bank rate and other deposit requirements of the commercial banks, government should ensure that policies to stabilize inflation rate are formulated and implemented to increase the volume of spendable cash in the hands of individuals in order to ensure high turnover in the manufacturing sector and increase their output.

How to Cite
Olawumi, O. R., & Ogungbenle, S. (2022). Bank Lending, Economic Growth and Manufacturing Sector Performance in Nigeria: 1981-2020. European Journal of Science, Innovation and Technology, 2(1), 204-216. Retrieved from
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