Selected Macroeconomic Variables and Textiles Industry Output in Nigeria

The textiles industry in Nigeria used to be the highest employer of labour, apart from the federal government in the 1980s but due to its lack of competitive edge, poor policy implementation; lack of technological capability, high cost of production, inadequate infrastructure such as transportation, water supply, electricity supply and telecommunications etc. Its membership has shrunk from 175 firms in 1985 to less than 20 firms in 2022 and exportability is next to zero this is why the aim of this paper is to investigate the relationship that exists between selected macroeconomic variables and textiles industry output in Nigeria. Ex-post facto design was adopted. Data were sourced from CBN annual statistical bulletin, the National Bureau of Statistics, and the World Bank. ARDL was adopted for data analysis. ADF Unit root tests revealed mixed order of integration while Co-integration Bounds test revealed the existence of long-run relationship between the dependent and independent variables. Findings revealed that there is a long-run relationship among the variables. While interest rate, exchange rate and net exports have positive relationship on textile industry, government capital expenditure has negative relationship with textile industry output. The probability values indicate that all the variables do not have significant impact on textiles industry output. The paper recommends that the Central Bank should formulate deliberate policy measures that will bring down the exchange rate and capital expenditure should be increased to the real sector to encourage investment in the manufacturing sector and the textile industry sub sector.