ICT AND MANUFACTURING SECTOR PERFORMANCE: INSIGHTS FROM APPLICATION OF ARDL BOUNDS TEST APPROACH WITH A STRUCTURAL BREAK TO NIGERIA

This study investigates the impact of Information and Communication Technology (ICT) on Nigeria’s manufacturing sector using an annual time series dataset for the period 1981-2021. This is necessitated by the fact that although manufacturing sector plays a catalytic role in economic transformation and industrialization, but in Nigeria, the sector has continued to experience a decline output, prompting a search for solutions. To achieve its objective, the study employs both descriptive and inferential methods of data analyses. For the inferential analysis, the Autoregressive Distributed Lag (ARDL) bounds test with a structural break examines the long-run and short-run effects of ICT on manufacturing performance, controlling for human capital, foreign direct investment (FDI), and capacity utilization. The findings reveal a significant long-run positive impact of ICT and FDI, even after accounting for a structural break in 1993. In the short run, human capital enhances manufacturing output, while FDI has a negative effect in the short-run. These results underscore the importance of strengthening ICT infrastructure, attracting FDI, and enhancing human capital to drive manufacturing growth. Thus, policymakers should foster a conducive environment for digital adoption and foreign investment while prioritizing skills development to maximize the sector’s potential.