There has been a growing concern on the decline of the output of the manufacturing sector in Nigeria in recent times, despite the fact that the government embarked on several strategies aimed at improving industrial production and capacity utilization of the sector. This worry is understandable in view of the fact that it has been generally acclaimed, through the Kaldor’s first law, that manufacturing sector is regarded as the engine of growth of the economy (Libanio, 2006).
The unimpressive performance of the sector in Nigeria is mainly due to massive importation of finished goods and inadequate financial support for the manufacturing sector, which ultimately has contributed to the reduction in capacity utilization of the manufacturing sector in the country. Enebong (2003) argued that the level of the Nigerian manufacturing organizations’ performance will continue to see a decline because as it is now, the manufacturers will have even more problems in assessing raw materials due to stiff competition from the foreign firms. Figure 1 shows that the average manufacturing capacity utilization rates which was 42.0% in 1991 was reduced to 29.3% in 1995, before picking up to 36.1% and 53.9% in 2000 and 2008 respectively.
1.1 Introduction
In this section, Bank Lending, Economic Growth and the Performance of the Manufacturing Sector in Nigeria is discussed, with relevant and recent citations. As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the aim and objectives of the study. Others are significance of the study, scope of work, research hypothesis and questions, limitation of the study and definition of terms.