Domestic Competitiveness of the Nigerian Manufacturing Sector: Implications for African Free Trade Area

Abstract

The manufacturing sector is well known to be one of the major growth engines in all economies hence the decision to evaluate the competitiveness of the sector as Africa launches the largest free trade area since the creation of the World Trade Organization.; Africa Continental Free Trade Area (AfCFTA).The aim of this paper is to determine the internal competitiveness of the manufacturing sector vis a vis other sectors in Nigeria as well as the sub-sectors driving competitiveness in the sector in order to consolidate on the strong drivers while strengthening the weaker sub-sectors to be able to benefit optimally from the gains of the AfCFTA. Employing time series data sourced from the World Development Indicators and the Central Bank of Nigeria statistical bulletins on growth of GDP per capita (proxied for competitiveness), the share of manufacturing, service and agriculture in GDP, an ARDL specification was estimated. The findings show that the manufacturing sector in Nigeria is very uncompetitive. The paper therefore recommends a thorough overhaul of the structures that drive competitiveness in the manufacturing sector