Economic Impact of Sectoral Transactions in Nigeria

Abstract

Most applications of input-output (I-O) analysis to date have been to highlight inter-industry flows and to estimate the main aggregate national accounts, such as GDP, gross output and final demand categories. However, multiplier coefficients relating to output and income multipliers have hardly been explored especially in the Nigerian context. Sectors like agriculture, fishing, food & beverages as well as mining/quarrying have particularly significant roles and their economic impacts can be quantified using Nigeria’s I-O table. The study adopted a longitudinal design and utilized the 2015 I-O table comprising of twenty-six (26) sectors obtained from Eurostat database. This table was used to compile an inter-industry transaction table and Leontief matrix, which was then used to derive industry-wise Type I and Type II multipliers fo r the aforementioned sectors. Type I multiplier takes into account the direct and indirect effects while the Type II multiplier captured the induced effects in addition to the direct and indirect effects. Mining/quarrying as a single sector had a Type I multiplier of 1.80 and 2.17 for both output and income respectively and a Type II multiplier of 2.41 and 3.12 for both output and income respectively. Similarly, the fishing sector s were identified to have the highest contributions (2.11 and 2.89 as well as 2.22 and 3.19) in both Types I and II multipliers for both output and income respectively when compared with other sectors.