Abstract

International Journal of Innovations in Management Science,University of Ghana,Medina,April 2012,Volume 4,Number 2 pp.131-141. The paper observes that Industrialization involves extensive technological development of the production system of an economy. Industrial development therefore represents a deliberate and sustained application and combination of suitable technology, management techniques and other resources to move an economy from the traditional low production to a more automated and efficient system of mass production of goods and services. Nigerian economy which was mainly agrarian pre-independence gained rapid industrialization priority after the first national development plan of 1962 to 1969.The focus of this paper is to assess the evolution of industrial development in Nigerian economy, its challenges and prospects. The capacity utilization of the industry which fluctuated between 70 and 75 in the period 1970-1980 due to overvalued naira and substantial supply of imported raw materials, dropped to 45% in 2005 and further dropped to 41.8% in 2006.The problems of weak demand for local manufactured goods, high cost of production due to inflation, incessant power outages which resulted into high cost of maintaining power generating sets, Globalization and stiff competition from cheap imports, high bank rates and down turn in Nigerian economy are the identified problems with banks regarding the sector as a high risk area for lending. The methodology adopted is empirical and descriptive by opinion survey. Analysis of Variance (ANOVA) statistical tool was used to analyze the survey result. The result of the survey shows that an economy cannot develop if the real sector is not active. The paper concludes that there is the need for good and viable operating environment guided by policies that will enhance development in the real sector and active participation by the banking industry to help develop the sector.