Adeleke Omolade

The principal objective of this study is to investigate the relationship between monetary policy and growth of the manufacturing sector in Algeria. Using a structural vector autoregressive model and quarterly frequency data for the period 1980Q1 to 2010Q4, the study finds no evidence that money supply responds to fluctuations in manufacturing sector growth or Gross Domestic Product (GDP) growth. Interest rates, however, are seen to explain nearly a third of the variations in manufacturing output growth, suggesting that the manufacturing sector is sensitive to interest rates. The study also reveals that money supply variations are largely explained by changes in interest rates. A peek at the monetary transmission process reveals that Algeria employs monetary aggregates as the primary operating tool of monetary policy. The monetary authorities adjust total money supply in response to any movements in the rate of interest, probably to keep the rate of interest within a certain target given other developments in the fundamentals. The interest rates, in turn, play an important role in determining variations in manufacturing sector growth. In addition, the interest rates significantly affect exchange rates, which are observed to respond to changes in overall GDP growth. It is the overall GDP growth that has the largest influence on manufacturing sector growth, probably due to strong forward and backward linkages between the manufacturing sector and other sectors of the economy.

Keywords: Monetary policy, transmission mechanism, manufacturing output, oil price shocks.
JEL Classifications: E23, E31, E52

The paper conducts a short-run analysis of the implications of oil price movements and exchange rate relationship for the Nigerian manufacturing sector growth between January 2008 and September 2017. Monthly data are extracted on variables such as oil price, exchange rate, inflation rate, interest (lending) rate, money supply and the manufacturing sector growth rate. Oil price movements are viewed in terms of both volatility and change. While EGARCH is used to estimate oil price volatility, oil price change is measured using Hamilton index for both oil price sharp drop and jump. The SVAR results indicate that exchange rate and inflation rate are more responsive to sharp drop in oil price. The two variables also have the highest impact on the manufacturing sector growth. Findings further indicate that Nigerian manufacturing sector is more affected at the cost side than the output side. This underscores the importance of tackling the inflation pressure in Nigeria from the structural perspective as against the monetary perspective.

The study examined the nature and structure of alternative supply of electricity in Nigeria. It has been observed that all the efforts of the Nigerian government to improve electricity supply and promote access to electricity have been proving abortive and households at various levels are confronted with the challenge of searching for alternative supply of electricity. Also, state government and some private organizations are interested in solving this challenge, but they lack appropriate empirically grounded information on the choice of alternative source of electricity. The study, which is a pure exploratory one, used primary data through well-structured questionnaire from a sample of 4,758 households across 16 local governments in Ekiti State of Nigeria. Applying descriptive statistics, the strengths and weaknesses of various alternative sources of electricity supply among households were analyzed. The results indicate that rechargeable appliances, electricity generating set, inverter and solar/inverter are the four major types of alternative sources of electricity supply common among the households. It was also revealed that out of all the positive ratings such as regularity in supply, ease of maintenance and capacity, solar powered source of alternative electricity supply appears to be the best. The only rating that is unfavorable to the solar type of alternative sources of electricity supply is in the area of affordability. Government and interested private organizations should embark on establishment of solar powered stations for some communities or distribution of solar panels and inverters at subsidized rate to households to improve their socio-economic well-being.