Abstract:
This study seeks to examine the Impact of Lease financing on the performance of the Nigerian manufacturing sector (the manufacturing output-GDP ratio) and; to determine the impact of the exchange rate on the manufacturing sector output-GDP ratio. The study also assessed the impact of the growth rate of GDP on the manufacturing sector output-GDP ratio among others. In line with these objectives, four hypotheses were formulated. However, financing the acquisition of capital assets since the introduction of Structura l Adjustment Programme (SAP) in Nigeria in 1986 has continued to be a major hurdle amongst manufacturing firms in Nigeria. Thus, the high naira exchange rate against the dollar and the soaring interest rate due to the deregulation of the economy had made lease financing a viable option for capital assets acquisition amongst enterprises in Nigeria, particularly firm s in the manufacturing sector of the economy. The study used time serial data for seventeen (17) years covering the period of 1990- 2006. The technique of analysis used in the study was the Ordinary Least Squares Statistical Method. The Regression results showed that there was a significant relationship existing between manufacturing output ratio and volume of lease to the manufacturing sector (LEASE). While the positive relationship between exchange rate and manufacturing sector performance means that the sector relied more on imported inputs for production. We also discovered that there was a significance and positive relationship between the volume of exports and manufacturing output- GDP ratio, as the manufactured outputs contributed significantly to the amount of goods exported from Nigeria. Based on the findings of the study, we recommended that there is dire need for extensive publicity on the supposed benefits and mechanics of leasing by the Equipment Leasing Association of Nigeria (ELA N). The provision of International Accounting Standard 17 (IAS 17) and Statement of Accounting Standard 11 (SAS 11) should be observed by the practitioners in the leasing industry for healthy development of the business. While, adequate and proper tax incentives for assets on leasing should be provided. The study also recommended that appropriate legislations should be promulgated to boast leasing business in the country and that lease financing should be encouraged to enhance the gearing ratios of the companies and a vibrant leasing industry should be created that would make productive assets easily lease able to all sectors of the Nigerian economy in order to enhance growth and development.
