CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Over the year, Nigeria government has been making series of effort attaining a highly industrialized self-reliant economy. These efforts have been due to the obvious realization by the government of the important of industrialization in economic development of economy and so the importance of manufacturing sector of Nigerian economy cannot be over-emphasized. The sector only provides the finished good, which we need but for lack of which we look abroad foreign exchange through exportation of its products.
Before 1980 when oil (back gold) was first discovered in river state, agriculture was the major foreign exchange earner in Nigeria. But with the high oil production in the early 70’s. agriculture started losing important in the economy and since then up fill date the oil sector was remain the major foreign exchange earner for Nigeria. The oil boom of the early 70’s however contributed to a large extent to the growth of industries in the country. Certainly, it was after taken the post war era that the Nigerian government starts taken measures to boost. Agriculture as a supplement to the growth and development of the manufacturing industries as well as the economy. Important among these was the joint ownership of industries between the government and foreign firms. But perhaps the most significant of all was the indigenization principle introduce by Yakubu Gowon government in 1972.
The concept was to exclusively reserve some business for Nigeria or increase their participation. But this policy was however, poorly managed as some foreigners used Nigeria as front in an effort to evade regulation. One of the major ways through which manufacturing firm can be encouraged is through availability of finance for their operation. In Nigeria today finance seem to be or it’s the hardest thing to obtain as a result of several variables of which one of the most important is the ever-increasing rate of interest.
According to Nwachukwu (2013). This states of affairs is lamentable as manufacturing offers by for the best potential of the country. It was the potential for growth. It could be the fastest growing sector of the economy, but with problem that the ministry has to contend with the under capacity utilization, the counting is simply not read, to export and so it high time the industries, the government, the citizen in general developed a concentrated effort aimed at normalizing the pathetic state of affairs.
1.2 STATEMENT OF THE PROBLEM
One cannot be find various views regarding or concerning the impact of high banks lending rate on manufacturing firm. The major task of this research in therefore a critical analysis of the impact of high banks lending rates to see how they have affected the manufacturing say sector.