SMART STEPHEN IFEANYI

This study empirically analyzes the impacts of public debt on manufacturing capacity in Nigeria. The broad objective of this study is to empirically analyze the impacts of public debt on manufacturing capacity in Nigeria. The Ordinary Least Squares method was adopted to analyze the relationship between public debt and manufacturing capacity, private sector loan, Gross Domestic Product, consumption expenditure and interest rate. Secondary data which spans from 1981 to 2024, sourced from the Central Bank of Nigeria statistical bulletin for real sector, public sector and World Development Index, was extracted and utilized for empirical analysis. Some forms of pre-estimation tests were carried out in order to obtain satisfactory results. Such tests are the unit root test: test for stationarity, the co-integration test which tests for long run equilibrium relation between the variables of interest of this study. This study seeks to discover the effect of public debt on manufacturing capacity in Nigeria. Therefore, in conclusion public debt positively impacts on manufacturing capacity in Nigeria and it is significant, private sector loan has a significant positive impact on manufacturing capacity, Gross Domestic Product has a significant positive impact on the manufacturing capacity however both consumption expenditure and interest rate have negative impact on manufacturing capacity. Haven discovered from this study the significant positive impact of public on manufacturing capacity in Nigeria, it is therefore recommended that: The federal government should ensure that enough capital is available for the manufacturing sector given the importance of the manufacturing sector to the Nigerian economy. The monetary authority should ensure that the level of interest rate (cost of capital) does not discourage domestic manufacturing industries that need capital from both the money market and the capital market for investment purpose.