Macro-economic determinants of industrial output in Nigeria: Exchange rate and employment dimension

This study looks at the macro-economic determinants of industrial output in relation to exchange rate and employment in Nigeria. It employs the Autoregressive Distribution Lag (ARDL) econometric approach to co-integration using time series data for the period of 30 years (1986 -2016) to examine the long-run relationship between industrial performance and some macroeconomic variables in Nigeria to gain insights into the industrial paradox of high inflation and low employment rate alongsiderising interest rate, incessant power outage and political treat in the economy. Results obtained from the ARDL econometric approach shows that in the long-run increase in employment rate and political stability has the potential of enhancing industrial output by 83.07% and 15.2% respectively; while ineffective exchange rate, high inflationrate andincessant power outage in Nigeria reduces industrial performance by 8.15%, 19.0%. Based on the results obtained, thestudy therefore recommends that monetary and fiscal policies should be geared towards combating unavailability of jobs in the countryand increase investment directed toward improving the solid mineral sector. There is also need for the government to maintainsecured monetary and fiscal policies in order to fight inflation which has a negative effect on investment and exchange rate, thereby dwindle performance of the economy.