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Prominent among the obstacles facing the performance of manufacturing sector in Nigeria is the lack of effectively bank credits to the manufacturing sector of the economy.
The banks especially the commercial ones have not been contributing effectively to the output of manufacturing sector of the economy.
This study takes into cognizance the problems of manufacturing sector in Nigeria. Beside; it looks into the various economic effects of inefficiency of bank credits to the manufacturing sector in Nigeria over the period of 1981 – 2004, using the Nigeria data set. The study employed the ordinary least square regression method.
Above all, this project examines the earlier interventionist efforts by the CBN toward achieving a stable and low interest rate on the credits from the commercial banks to the manufacturing sectors in the economy and finally resolved to give useful recommendations on ways to improve upon the performance of the bank credits to the manufacturing sector in the economy.
1.1 BACKGROUND TO THE STUDY
Manufacturing sector plays a catalytic role in a modern economy and has many dynamic benefits crucial for economic transformation. In a typical advanced Country, the manufacturing sector is a leading sector in many respects. It is an avenue for increasing productivity related to import replacement and export expansion, creating foreign exchange earning capacity; and raising employment and per capital income which causes unique consumption patterns. Furthermore, it creates investment capital at a faster rate than any other sector of the economy while promoting wider and more effective linkages among different sectors.
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