Economic and Financial Review


Central Bank of Nigeria


Monetary policy, Manufacturing sector, Nigeria


This study examined the effect of monetary policy on the manufacturing sector in Nigeria from 1970 to 2012 using Autoregressive Distributed Lag (ARDL) bound testing approach. Exchange rate was found as the only channel of monetary policy transmission with significantly negative effect on the manufacturing sector. This implies that manufacturing firms largely rely on foreign inputs for production and do not depend on the banking system for funding. The study, therefore, recommends indigenous technology and financial system development to reduce dependence on imported inputs and facilitate access to more funds.

Author Bio

Muhammad Ali is a Research Associate at Econometrica Consultants Limited, Ibrahim H. Aliero (PhD) and Mika’ilu Abubakar (PhD) are Senior Lecturers at the Department of Economics, Faculty of Social Sciences, Usman Danfodiyo University, Sokoto.

Publication Title

CBN Economic and Financial Review





Recommended Citation

Ali, M., Aliero, H., and Abubakar, M. (2015). An empirical analysis of the effect of monetary policy on the manufacturing sector in Nigeria. CBN Economic and Financial Review, 53(2), 19-46.

Included in

Economics Commons



To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.