Industrialization and the Quest for Economic Diversification in Nigeria: 1970-2017

Abstract

The study examines industrialization and the quest for economic diversification in Nigeria. Specifically; it examined the structure and trend of industrial output in Nigeria and evaluates the effect of industrial output for economic diversification in Nigeria. The theoretical framework is the Great Push Theory & Kaldor’s First Law. The research adopted an econometric design and sourced secondary data from Central Bank of Nigeria, National Bureau of Statistics publications and World Bank Development Indicators. Both Descriptive and Analytical tools were employed and the Vector Error Correction Method were used for estimation of the model. The findings of the study based on the impulse response shows that solid mineral (SOM), manufacturing (MAN) and crude petroleum & natural gas (CPNG) exert negative relationship with real gross domestic product while variance decomposition, reveals that CPNG account for the highest percentage contribution followed by solid mineral, manufacturing, private investment (PI), government capital expenditure (GCE) and industrial energy consumption (IEC) respectively. Given the proportionality in the coefficient of SOM, MAN, CPNG, PI and IEC, the study recommends that government of Nigeria should go into public-private partnership (either domestic or foreign) to bring in their technological know-how and financial capability to develop these sub-sector for a diversified economy as against the current mono-economy.