The Impact of Infrastructural Development on Nigeria's Industrial Sector

Abstract

The importance of infrastructure to the industrial sector of any economy cannot be overlooked, thus making its development key to the survival of the sector. The purpose of this study is to analyse the effects of infrastructure on the industrial sector of Nigeria. In that vein, ordinary least square method of regression analysis was adopted, using time series data spanning from 1990 to 2015. Industry value-added (% of GDP) was used as an indicator of Nigeria’s industrial sector performance, while index of electricity consumption, gross capital formation, and federal government spending on transport and communication were used as indicators for infrastructural development. The results of the regression showed that the index of electricity consumption exerted a positive but insignificant impact on industry value-added; gross capital formation and federal government spending had a negative but significant impact on industry value-added on industry value-added (on a 5% confidence level). The study recommended that measures to revamp and maintain the power sector of Nigeria must be taken seriously to ensure better supply of power. It was also recommended that corruption be curbed and projects, for which funds are disbursed, be properly monitored so as to ensure that efficient and long-lasting infrastructure will be built and properly maintained to encourage greater industrial output.

Key Words: Industrial sector, Infrastructure, Power supply.