The near free fall of the naira in the parallel-market as a result of persistent fall in the international price of crude-oil is indicative of a monolithic economy. Oil export had accounted for an average of 97 percent total export since 1981 to 2013, hence in the current face of dwindling foreign exchange earnings tremendous pressure is been exacted on the naira. This study seeks to examine this phenomenon of inflation in Nigeria in terms of structural rigidities that have limited agricultural output and of course diversification of the Nigerian economy. Based on theoretical underpinnings two explanatory variables were specified in the model of the study, where the study sought to establish relationship between the explanatory variables and manufacturing capacity utilization (MCU) in Nigeria.
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