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Abstract

The study investigated the effects of capital imports on manufacturing sector performance in Nigeria. Data from various sources such as World Integrated Trade System (WITS) database (2024) and Central Bank of Nigeria (2024) were utilized and analysed using descriptive analysis and the Autoregressive Distributive Lag (ARDL) Model. Empirical findings from the study reveal that both the values of capital goods import and its percentage to the GDP have been fluctuating. In fact, the percentage of capital goods import to GDP has not experienced any significant change. This implies that periods of increased capital goods importation experienced increased GDP and increased percentage of Capital goods to GDP. A useful conclusion could be one factor needed to stimulate growth in Nigeria is increased capital goods importation. The study further attempted to investigate the factors that significantly determine capital goods import in Nigeria. The results reveal that exchange rate, inflation, domestic investment and gross domestic product significantly determine capital goods import. Furthermore, the study then proceeded to investigate the effects of capital goods on the performance of the manufacturing sector in Nigeria. The results revealed that capital goods import positively and significantly influence manufacturing sector performance both in the short run and long run. This implies that availability of capital goods in the domestic economy is very vital for the effective and efficient performance of the manufacturing sector in Nigeria. Also, population growth and domestic investment exhibit positive and significant relationship with manufacturing sector performance. This means that population growth which signifies labour supply because in Nigeria, a large proportion of the population falls within the labour force.