RELATIONSHIP BETWEEN DOMESTIC DIVERSIFICATION AND UNEMPLOYMENT RATE IN NIGERIA

Abstract

The major objective of this study is to investigate the relationship existing between Domestic diversification and Unemployment rate in the Nigerian economy. In line with this objective, a quantitative method within the framework of Autoregressive Distributed Lag (ARDL) model was employed. Agricultural Value Added (AGVA), Manufacturing Value Added (MVA) and Service Value Added (SVA) were the major independent variables for the study, while Unemployment rate (UNEPL) was the dependent variable. The data for the study consisted of annual time series covering the period of 1986 to 2023. Findings from the study revealed that agriculture and service diversifications have positive and statistically significant relationships with unemployment rate in Nigeria. This implies that higher level of agriculture and service diversifications are associated with higher unemployment rate in the economy against theoretical postulations. Desirably however, a negative relationship was discovered between manufacturing diversification and unemployment rate in the short run, suggesting that improved manufacturing diversification is associated with lower unemployment rate in the economy. Cursory to these findings, the study therefore recommended establishment of more agriculture mechanization centres across geopolitical zones to improve production, improvement in the use of Information Communication Technologies as well as reduction in the cost of internet services as a means toward improving overall service production in the economy, reduction and harmonization of manufacturing tax rate, improvement in power supply and transportation networks so as to increase overall production level in the economy.