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Determinants of Industrial Output in the Selected West African Monetary Zone: A Fixed-Effects Approach

Ajao, Adebayo Simon, Ernest Simeon Odior, PhD, Ignatius Clement Ituh, PhD, Lawal, Folasade Modupe

Abstract

This research investigates determinants of industrial output among selected West Africa Monetary Zone economies, specifically Nigeria, Ghana, Gambia and Sierra Leone. The research examined the impact of key macroeconomic variables such as labour force participation, real effective exchange rate, GDP per capita, gross fixed capital formation, governance index and foreign direct investment on industrial output in the selected West Africa Monetary Zone economies between 1990-2023. The research used fixed-effect panel data regression to reveal that per capita income, foreign direct investment, exchange rate, and labour force participation significantly impact industrial output within the selected WAMZ economies. The research recommends that WAMZ countries should implement robust monetary policies to stabilize exchange rate. Given the significant relationship between the labour force and industrial output, the WAMZ government should invest in building the capacity of the labour force in line with the emerging industrial sectors to drive sustained growth and productivity. There is a need to foster partnerships between educational institutions and industrial sectors to drive skills transfer and align curriculum with the emerging industrial skills needed to boost industrial output. The governments of WAMZ economies should adopt industrial policies that will diversify industrial base of their respective economies into value-added industries.

Keywords

Industrial OutputWest African Monetary ZoneFixed effect JEL Code: L60F45C20

References

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