Relationship between the economy, construction sector and imports in Nigeria: Fid-Bau Portal

Relationship between the economy, construction sector and imports in Nigeria

Saka, Najimu / Olanipekun, Ayokunle Olubunmi

Increase in construction output through infrastructure development increases economic development. However, construction sectors in developing countries are import-dependent, and current knowledge has suggested that the dependence needs to be reduced to enhance the sector’s contribution to economic development. To demonstrate that this knowledge is applicable in the Nigerian construction sector, this study was aimed at establishing a relationship between economic development, construction sector output and imports using time series data covering a forty-seven-year period (1970-2016). The study used econometric methodology involving tests for stationarity, cointegration, causality and exogeneity. From the findings, the evaluation of the relationship between the economy and construction sector output produced a linear relationship when construction sector import was excluded from the analysis, and when it was included, the construction sector output Granger cause construction sector imports. The study concluded that relationship between the economy and construction sector output has an impact on construction sector import in Nigeria. The implication was that economic and construction production policies could be employed to influence construction sector imports in Nigeria, and other developing countries whose construction sectors are import-dependent.