Impact of Labour Market and Manufacturing Sector on Economic Growth in Nigeria

Abstract

This study examines the impact of the labour market and the manufacturing sector on Nigeria's economic growth from 1993 to 2023. Time series data was used while Solow-Swan growth model and Dynamic Ordinary Least Square (DOLS) analysis were adopted for the processing of the data. The study investigates the relationship between economic growth and key variables, such as labour market participation, manufacturing output, gross fixed capital formation, inflation, and interest rates. The findings reveal that the labour market, manufacturing output, and gross fixed capital formation positively and significantly influence Nigeria's real GDP, indicating their pivotal roles in driving economic growth. Conversely, inflation and interest rates exhibit a negative but significant effect on economic growth. The study highlights the need for targeted policies to enhance workforce skills, increase credit accessibility for small and medium-sized enterprises, and foster public-private sector collaborations to boost manufacturing and economic growth. These insights provide valuable recommendations for policymakers aiming to achieve sustainable economic development in Nigeria.