Domestic Resource Mobilisation and Industrial Sector Performance In Ecowas Countries: Evidence From Ghana And Nigeria
Lionel Effiom and Peter Ubi
Abstract
This paper investigates the relative impact of domestic resource mobilisation (DRM) on the industrial sectors of Ghana and Nigeria. Three variables – remittances, tax revenue, and savings – were used to capture the DRM phenomenon. Employing the ARDL bounds testing procedure, findings indicate that all DRM variables had significant but varying effects on industrial sector performance in both countries. While remittances and tax revenues impacted positively on Ghana’s industrial output, they had opposite effect on Nigeria’s. Conversely, while savings had a benevolent impact on Nigeria’s industrial output, the same could not be said of Ghana’s. Furthermore, the two economies are plagued by deficient institutional capacity to mobilize local resources and deploy same to their industrial sectors. The study recommends, inter alia, the securitisation of future remittances by banks for critical infrastructure and developmental projects.
Keywords: DRM, Industrial Sector, Nigeria, Ghana
JEL Classification: D78, E22 and F65.