Naira Free Fall and Capacity Utilization of Manufacturing Firms in Nigeria (Published)
This study investigated the effect of the naira free fall on manufacturing sector capacity utilization in Nigeria from 1990 to 2023, while controlling for import volume index (IVI) and labour force (LF). Capacity utilization is widely regarded as a key measure of industrial efficiency, yet Nigeria’s manufacturing sector has consistently operated below international benchmarks, with persistent fluctuations largely linked to exchange rate volatility. The study employed an ex-post facto research design using secondary data obtained from the Central Bank of Nigeria and the World Bank Database. The Autoregressive Distributed Lag (ARDL) model was applied to capture both short-run and long-run dynamics among the variables. Naira free fall was proxied by official exchange rate, import volume index and labour force, while capacity utilization was proxied by average manufacturing capacity utilization rate (AMCUR) The findings showed that the official exchange rate (EXRATE) exerts a positive and statistically significant long-run effect on AMCUR, with a coefficient of 0.1043 and (p = 0.0234). This implies that naira depreciation enhances competitiveness by encouraging local consumption of domestic goods. In contrast, the import volume index (IVI) and labour force (LF) were found to be statistically insignificant, (p=0.3092, 0.9483) despite their positive and negative coefficients (0.034297, -1.423446) respectively, suggesting that fluctuations in imports and workforce size did not play a meaningful role in shaping capacity utilization during the study period. The error correction term (-0.8899, p < 0.01) confirmed a strong adjustment mechanism, with about 89% of deviations from equilibrium corrected annually. With an adjusted R² of 0.66, the model demonstrated good explanatory power. The study concludes that while exchange rate remains the dominant driver of manufacturing capacity utilization, policy measures aimed at stabilizing the currency must be complemented by broader industrial reforms such as infrastructural development, credit access, and local raw material sourcing to sustain higher utilization rates. The study contributes to literature by providing fresh evidence on how exchange rate, imports, and labour dynamics jointly shape manufacturing performance in Nigeria.
Keywords: Capacity Utilization, Manufacturing sector, Nigeria, ardl model, import volume index, labour force
Review Of Operational Constraints Responsible For Benue Cement Company’s Inability to Achieve Strategic Business Mission and Objectives (Published)
This study is a critical review to determine the operational constraints responsible for Benue Cement Company Plc’s inability to achieve its strategic business mission/objectives, which led to its takeover by Dangote Cement Plc as its subsidiary plant. The research method adopted is an analytical, historical and descriptive survey analysis. Primary and secondary sources of data were used for the study. The instrument use for data collection was a five point Likert scale questionnaire designed to meet the research objectives for the study. 308 participants were used for the study. Analyses of data and result from literature and empirical reviews suggests that: BCC Plc had these operational constraints: low capacity utilization, weak liquidity, erratic public power supply, higher prices of petroleum products, re-capitalization, high operating and distribution cost; inability to meet customer demand ; production and distribution inefficiency, inadequate spare parts, raw materials scarcity, management inability to manage its business opportunities and threats, incessant plant breakdown, which resulted in occasional shift in brand preference . The research conclude that BCC Plc’s management lacked good sense of urgency in managing the company’s operations to survive, grow, remain competitive and profitable to achieve strategic business mission and objectives in its business operations.
Keywords: Benue Cement Company Plc, Capacity Utilization, Operations, Strategic Business Mission, Technology, theory of Constraints
Impact of Fiscal Policy on the Manufacturing Sector Output in Nigeria: An Error Correction Analysis (Published)
There has been a growing concern on the role of fiscal policy on the output and input of manufacturing industry in Nigeria, despite the fact that the government had embarked on several policies aimed at improving the growth of Nigerian economy through the contribution of manufacturing industry to the economy and capacity utilization of the sector. The aim of this study is to examine the impact of fiscal policy on the manufacturing sector output in Nigeria. Empirical evidence from the developed and developing economies has shown that fiscal and monetary policies have the capacity to influence the entire economy if it is well managed. An ex-post facto design (quantitative research design) was used to carry out this study. The results of the study indicate that government expenditure significantly affect manufacturing sector output based on the magnitude and the level of significance of the coefficient and p-value and there is a long-run relationship between fiscal policy and manufacturing sector output. The implication of this finding is that if government did not increase public expenditure and its implementation, Nigerian manufacturing sector output will not generate a corresponding increase in the growth of Nigerian economy. It is the recommendation of researcher that the expansionary fiscal policies should be encouraged as they play vital role for the growth of the manufacturing sector output in Nigeria; that fiscal policy should be given more priority attention towards the manufacturing sector by increasing the level of budget implementation, which will enhance aggregate spending in the economy; and consistent government implementation will contribute to the increase performance of manufacturing sector.
Keywords: Capacity Utilization, Co-integration, Error Correction Model, Government Expenditure, Government Tax Revenue, Manufacturing sector, Output
Assessing a New Decomposition of the Short and Long Run Cost Efficiency Frontiers in the Tunisian Manufacturing Sector (Published)
This paper analyzes the efficiency of the Tunisian manufacture sector using non-convex frontier methods. More specifically, it analyzes the total cost inefficiency and proposes its new decomposition into three additive components: short-run variable cost inefficiency; capacity utilization of fixed inputs, and scale inefficiency. The last two components correspond to the longrun cost efficiency concept. This exercise is applied to all the data in the Tunisian manufacturing industry. The results confirm the existence of significant cost inefficiency coefficients related to both long- and short-run analyses.
Keywords: Capacity Utilization, Data Envelopment Analysis, Efficiency, Non-convex Frontier