ABSTRACT

The study was conducted to examined the impact of Bank credit on manufacturing sector output in Nigeria. Given the lack of consensus among previous researches on the subject became the major problem of the study. The study sought to determine the impact of bank loan and advance, bank lending rate, bank savings deposit rate and inflation rate on manufacturing sector output in Nigeria. The study adopted ex-post research design, secondary annual time series data sourced from the Central Bank of Nigeria Statistical Bulletin was employed. The data collected were analyzed using multiple regression analysis. Johasen co-integration test and vector error correction test.  Other  diagnostic test such as unit root test, Normality test, serial correlation test and hetroskedasticity test were also conducted. Findings revealed that bank loan and advances had positive but insignificant impact on manufacturing sector output in Nigeria. Bank lending rate, Bank savings deposit rate and inflation rate all had negative but insignificant impact on manufacturing sector output in Nigeria. The study therefore recommends that Banks should strengthened their credit monitoring mechanism to ensure that loan and advance from banks are adequately utilized by manufacturing sector. The government should endeavor to improve the infrastructural base, such as adequate power supply, so as to reduce the operating cost and interest banks charges. Also Central Bank of Nigeria should purse moderately expansionary monetary policy to also reduce the cost of funds in the economy. The Central Bank of Nigeria should make policies that will encourage the manufacturing sector to make more saving in the country. Finally, Central Bank of Nigeria should take a critical look at the macroeconomic policy to regulate it effectively to the reduce the inflation level in the country to enhance the growth of the manufacturing sector.