Determinant of Private Investment in Nigeria’s Manufacturing Sub-sector

This study empirically investigates the determinants of private investment in Nigeria’s manufacturing sub-sector between the periods 1975 to 2013 using annual time series data sourced from Central Bank of Nigeria Statistical Bulletin of various issues. In carrying out the study, econometric techniques were employed to analyze the data collected. However, stationary and co-integration tests of the variables were examined using Augmented Dickey – Fuller and Johansen co-integration tests respectively. Also, an endogenous growth model was specified and estimated using error correction mechanism (ECM) technique in order to test for the dynamic characteristics of the variables in the model. The results show that the main determinant of private investment in the manufacturing sub- sector of the Nigerian economy is interest rate, exchange rate and public sector investment. The study concludes that the empirically identified factors influencing private sector investment should be well – managed by the government to boost private investment in the manufacturing sub- sector and to ensure to the complete diversification of the Nigerian economy.