Assessing the Economic Impact of the Employment on Economic Growth in Nigeria

Abstract

This study examined the impact of manufacturing sector on economic growth in Nigeria. The annual time series data was collected from world development indicator and Central bank of Nigeria respectively, covering 39 years span from 1986 to 2024 were used. The expost factor research design was used for this work. The study employed the econometric estimation technique of Autoregressive Distribution Lag (ARDL) model was used for the analysis, adopting annual data method of analysis. Aside that, a lot of tests were conducted such as co-integration test, bound test, long- run and short- run test ADF stationarity etc from the result estimated, all the explanatory variables were consistent with a priori expectation. This implies that a unitincrease in gross domestic product (GDP), political instability (PLS), and real exchange rate (REXCH), ratio of gross domestic product – employment (GDPEMPL) will lead to an increase of about 2.539 units, 10.320 units, and 0.00125 units and 0.110 increase in an employment in Nigeria respectively ceteris paribus. Also, the result showed that a one percent increase in log of infrastructure (INFR), LOG loan resulted in a 11.1746 percent decrease in employment, all things being equal. The positive impact of GDP on employment suggests that policies promoting sustained and inclusive economic growth—especially through manufacturing, agriculture, and technology-driven sectors—should be strengthened. Growth policies must prioritize sectors with high employment elasticity. Enhance Political Stability: Since political instability influences employment outcomes, the government should deepen democratic governance, strengthen rule of law, and ensure security across all regions. Political stability enhances investor confidence and encourages private sector expansion, leading to more job creation.