Author: Peter Ubi & Enang Udah
Volume: 61 Issue No:1 Year:2019

Abstract: This study examined if any predictable relationship exists between industrial growth and infrastructure (governance and road) in Nigeria using data for the period 1980 to 2015. The study employed the vector autoregressive (VAR) model for the analysis. The estimated results showed that infrastructure (governance and road) has an important but restricted role to play in driving industrial growth. Specifically, the results indicated that own shocks constitute a significant source of variation in industrial output (IND) forecast errors in the short run, ranging from 66 per cent to 100 per cent over the 10 quarters horizon. Innovations to corruption (COR) and institutional quality (INQ) (all governance infrastructures) and innovations to road infrastructure explain 0 per cent variance of industrial output in the first quarter and these increase to 0.63 percent in the tenth quarter. The implications of these findings is that in the short-run, infrastructure does not significantly predict industrial output in Nigeria and industrial output seems to have a very strong prediction. The study, therefore, recommended appropriate governance framework (good institutional and corruption free framework) that would institutionalize best practices in policy formulation and implementation.

JEL Classification: L88, R42, O14