Real Exchange Rate, Innovation and Productivity in Nigeria

Abstract

This study analyzes the misalignment of real exchange rate and output of the Nigeria industrial sector. Following the objectives of the study, we formulated three research questions and three hypotheses to guide the study. Data were secondarily sourced from the Central Bank of Nigeria Annual Reports. Data collected were analyzed using the Ordinary Least Square method of analysis. The study employed econometric technique involving Augumented Dickey fuller (ADF) for unit root test. Our findings revealed that real exchange rate had significant influence on industrial output. Again, foreign exchanges with contentious export drive from both oil and non-oil products contribute enormously to increase industrial output. The study further reveals that the capacity utilization ratio is low, this may not be too far away from, partly epileptic power supply, lack of adequate and appropriate technology.