This study investigates the nexus between monetary policy and manufacturingcapacity utilization in Nigeria for the 1980-2014 period, using anerror-correctionmodelling approach. The results reveal that both current and past values oflendingrateadverselyaffectmanufacturingperformance,butmanufacturingrespondspositivelytothecurrentperiod’sbankingcredit,confirmingthatpolicy to enhance access to funds can stimulate investment in manufacturingsub-sector in Nigeria. Real exchange rate shows mixed performance; the currentexchangeratehasa negativebutinsignificanteffect,whereastheimpactoftheone-periodlaggedvaluewaspositiveandsignificantat 5%.Broadmoneysupplypositivelyandsignificantlyinfluencesmanufacturing.Theerror-correctiontermis significantandcorrectlysigned.Further,thevariancedecompositionshowsshock in monetary policy phenomena,explainsrelativelysignificantvariationsinmanufacturing performance. This study recommends that monetary authoritiesshould implement policies in line with the structure of the economy to enhancecontributionofmanufacturingsectortooveralleconomicgrowth.Effortshouldbemadetoenhancetheflowofcredittotheeconomy,whileadoptingeffectiveexchange rate management in a stable macroeconomic environment to boostindustrial production.