FISCAL POLICY AND MANUFACTURING CAPACITY UTILIZATION IN NIGERIA
Keywords:
Fiscal Policy, Manufacturing Capacity Utilization, TaxationAbstract
This study critically examined the impact of fiscal policy on sustainable manufacturing capacity utilization in Nigeria, providing empirical insights relevant to emerging economies. Utilizing a comprehensive dataset spanning various fiscal measures including taxation, government spending, and budget deficits. This research isolates the effects of these variables on the manufacturing sector. Data from 1986 to 2022 were sourced from the Central Bank of Nigeria's Statistical Bulletin. Following rigorous diagnostic tests, the time series data were validated for empirical analysis. The study employed the Autoregressive Distributed Lag (ARDL) model to estimate both the short-run and long-run impacts of fiscal policies on manufacturing capacity utilization, with appropriate controls for macroeconomic indicators such as interest rates and exchange rate stability. The findings revealed significant variations in how different fiscal policies influence manufacturing capacity utilization, underscoring the importance of coherent and effective policy frameworks to support sustainable industrial growth. The study concluded with policy recommendations tailored to optimize fiscal interventions, thereby enhancing industrial productivity and bolstering economic resilience in the face of both domestic and global challenges. These insights are crucial for policymakers seeking to refine economic strategies in Nigeria and other emerging economies.
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