Exchange Rate Regimes and Industrialization in Nigeria

This study investigated the impact of exchange rate regimes on industrial output growth in Nigeria using annual data series from 1960 to 2016. It employed various econometrics techniques, including: the unit root, the co-integration and the Auto-regressive Distributed Lag (ARDL) techniques. The result of the co-integration estimate showed the absence of co-integration among the variables while the long run estimate from the ARDL showed that the exchange rate has an insignificant impact on industrial production. So also, the result of the study showed that exchange rate regimes have not enhanced industrial production in Nigeria. The period of the flexible exchange rate regime had a negative and significant impact on industrial productivity in Nigeria. Sequel to the findings, the study recommended that the government should ensure that the exchange rate policy adopted enhances the performance of the industrial sector. In addition, there is a need for the government to shift her focus and policy directives towards the development of the industrial sector as this will attract the attention of foreign investors which will in turn increase the inflow of foreign capital into the economy and further strengthen the domestic exchange rate.