THE IMPACT OF SELECTED MACROECONOMIC VARIABLES ON INDUSTRIAL GROWTH IN SUB-SAHARAN AFRICAN COUNTRIES: ARDL-PMG APPROACH
Abstract
This study examined the impact of selected macroeconomic variables on industrial growth in sub-Saharan Africa (SSA) using annual data spanning from 1986 to 2024. The study employed ARDL model to estimate the short and long relationship between the selected macroeconomic variables and industrial growth in SSA. The results of this study revealed that “there is significant positive relationship between growth rate of real gross domestic product (RGDPgr), broad money supply (MS2) and real industrial growth rate (RINDR) in the long run. The findings of the study also showed that there is significant negative relationship between unemployment rate (UNMP) and RINDR both in the short run and long run in SSA. Moreover, there is insignificant negative relationship between real interest rate (RINT), real exchange rate (REXCH) and RINDR both in the short run and long run at 5% level of significance. It was concluded as a result of the findings of the study that exchange rate volatility is a serious to threat to industrialization and is aggravating unemployment rate in some SSA countries. In line with the findings, the study recommended that governments of SSA should set on motion the machinery and strategies that can boost the growth of industries in the region so as to mitigate the high level of unemployment as well endeavour to stabilize exchange rate through appropriate policies in order to boost investment in SSA.
