Moses Orshio Adasu University, Makurdi

An Empirical Investigation of the Determinants of Service Sector Growth in Nigeria (1981-2019)

Augustina Ogadinma Igboanusi, Dr. Silas Birat Garba and Dr. Tafida Abdullahi

Abstract

Service sector is taking the center stage in global economies despite the misconception of services as being non-tradable, unproductive and unable to drive growth in the past. The study seeks to assess the empirical investigation of the determinants of service sector growth in Nigeria from 1981 to 2019 using Autoregressive Distributive Lag model (ARDL). Unit root test was conducted to ascertain that none of the variables are integrated of order two while ARDL bounds test to cointegration was conducted and the result showed that there exists a long-run relationship among the variables employed in the model. The ARDL estimation result revealed that, gross domestic product per capita, human capital, government national expenditure and domestic credit to private sector are determinants of service sector growth in Nigeria while foreign direct investment and trade openness tends to impact service sector growth negatively both in the long-run and short-run. The study recommends that policy makers should optimize policies on services especially on human capital knowledeg-intensive project and programmes that will drive innovation(technology) such that will usher drastic change in not just services but will positively improve other sectors of the economy, attract foreign investors and establish a new path for trade (knowledge export).

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