An Empirical Review of Bank Credit and Manufacturing Sector Productivity in Nigeria

Abstract

This study provides a systematic empirical review of the impact of bank credit on manufacturing sector productivity in Nigeria. The research analyses the volume, cost, and real value of bank credit as independent variables affecting manufacturing productivity. A systematic literature review methodology was employed, analysing 45 empirical studies published between 1985 and 2023 from peer-reviewed journals and institutional reports. The analysis employed multiple regression techniques to synthesise findings across studies. Results revealed that the volume of bank credit shows a significant positive effect on manufacturing output but an insignificant negative effect on capacity utilisation. The cost of credit demonstrated a significant negative effect on both investment and capacity utilisation. The real value of credit showed a significant positive effect on overall sectoral productivity. The study concludes that while bank credit is essential, its efficacy is critically mediated by its affordability and real value, which are often eroded by macroeconomic instability. This underscores the necessity of complementary policies targeting macroeconomic stability and infrastructural development to enhance productivity within the manufacturing sector.

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