THE IMPACT OF GLOBALIZATION ON INDUSTRIAL GROWTH OF NIGERIA (1985-2011)
Globalization remains one of the most controversial subjects of our time. Several authors and ideological applications. Globalization is the close interaction between national economics through trade investment and capital flows made possible by technological development and advancement in telecommunication world to a global village. Globalization has evolved over the years but its rapidly intensified after the end of the world war.
According to Giddens (1990) Globalization can be defined as “the intensification of world wide social relation which link distant localities in such a way that local happenings are shaped by events occurring many miles away and vice-versa, irrespective of the ongoing controversy and measures of ambiguity in its uses, it often depicts the transformation of the relations between states, institutions groups and individuals, it describes the growing economic, political, technological and cultural linkages that connects individuals, business and Government around the world.
Globalization slowed during the world war as a result of protectionist policies applied to defend ideological interest by the major protagonists.
The main driving forces of this process are technology, policy and competition and its subordinate domestic economics to global market conditions and practices. Developed nations are the beneficiaries of globalization as their share of world trade and finance has expanded at the expenses of developing countries. Thus, the process has worsened inequality between the world’s region and providing in the developing world. Nigeria has not benefited from globalization due to mono culture export, inability to attract increased foreign investment and huge indebtedness. But globalization can be domesticated in the county through diversification of exports debt reduction and expanded development co-operation with other countries. The Nigerian
states also need to be strengthene as a bulwark against the dictates of foreign capital. All these accomplished, Nigeria could join the league of countries enjoying the benefits of Globalization.
1.1 BACKGROUND OF THE STUDY
Globalization is a system that confers benefits and posses challenges and risks to countries across the globe and has gained momentum from the last quarter of the twentieth (20th) century. It is the intensification of cross border trade and increased financial and foreign direct investments flows among nations, promoted by rapid advances in and liberalization of communication and information technology. Technology, polling and competition are the forces during globalization. This is attested to, for example, by advances in computing technology, which enables traders to meet their demands for financial instruments such as swaps and future with relative ease. Globalization constitutes a mega trend in global political economy and has assumed a new phase in contemporary international economic relations, given the merged socio-political and economic transformation as well as the technological economic transformation as well as the technological advancement in communication, information transportation etc. The process seems to be irreversible. Nations, states have indeed consistently intensified efforts towards engaging in business across national borders and constructing production and distribution network on a global production and distribution network on a global scale.
The international institution that overseen world trade and finance like the IMF, the world Bank, WTO play an increasingly important role in this era of globalization. Globalization has both negative and positive impacts, amongst the negative impacts are the rapid spread of diseases, crime, illicit drugs, terrorism and uncontrolled migration, which is one of the greatest problem facing Nigerian economy. The problem became more pronounced
and aggravated by the structural adjustment programme (SAP) and more recently by globalization. Given the low level of industrialization and the SAP. Induced under utilization of industrial capacity in the Nigeria economy, globalization has translated into the restriction of Nigeria to primary production even with this the price of primary commodities is extremely determined. This transport Nigeria into a powerless situation where she lacks direct control over the crisis in her economy because her hands are tied by the terms and dictates of globalization.
The most drastic evidence of globalization is the increase in trade and the movement of capital stocks, bonds, currencies and other volume of investments from the period of (1950-2001). The volume of worlds export rose by 20 times and by 2011, world trade amounted to a quarter of all the goods and services produced in the world. In the early (1970’s) only $10 billion to $20 billion in national currencies were exchange daily, by the early part of the 21st century.
More than $1.5million worth of ten, Euros, dollars, pounds and other currencies were traded daily to support the expanded levels of trade investment which is as a result of globalization.
1.2 STATEMENT OF THE PROBLEM
Globalization is a process of intensified inter dependence which makes it possible for any one (country) to isolate itself and expect to develop, the argument is that globalization makes it possible for all nations to benefit from interdependence. Interdependence is manifested in the increasing economic linkages among countries through trade and financial flow, it has been argued that interdependence entails amplified risk and uncertainties and one major challenge of most countries especially developing countries like Nigeria is “How to Manage this Risk and handle Uncertainties”, more profoundly, interdependence mean that opportunities for collective gains are enhances but
vulnerability is also greatly manifested. Developing countries are thus faced with the magnification of vulnerability and opportunity.
Globalization is a very uneven process with unequal distribution of its benefit and losses. This imbalance leads to polarization between the developed countries that gain and developing countries that lose out (OBADAN, 2001). In this regard, the place of Nigeria in the globalization agenda requires some indepth study. To begin with, Nigeria s economically weak due to inadequate domestic economic capacity and social infrastructure needed to boost the country’s productivity, growth and competitiveness.
Secondly, the economy is made weaker by mono-cultural dependency and infavourable terms of trade in its export trade as well as excruciating debt and debt service burdens. Thirdly, by (1986), economic regimes were regulated and the country pursued an expansionary fiscal and monetary policy in its development effort (Obadan 1998). The problems were exacerbated by political instability and corruption as a result, investment choices were distorted, which eroded the confidence especially for foreign investors.
Globalization is a dynamic process, the stronger countries are adjusting rapidly as the process advances, while the weaker ones find themselves further marginalized. The Nigerians inability to benefit from internalization is limited by numerous factors which includes poor domestic management of the economy, interest structural considerations of the economy and some policies of western industrial countries. The state of backwardness made Nigeria to be heavily reliant on foreign supplies of industrial inputs such as capital equipments, raw materials, spare parts and other intermediate materials. The challenges now is for Nigeria to use the enormous resources one has build to coherent, internally, consistent self sustaining economy which will be competitive in the world market. Nigeria must develop the essential physical and human infrastructural to compete.
Nigeria cannot expect to benefit from the process f international corporation without radical restricting of her economy, policies and society.
1.3 RESEARCH QUESTIONS
The following questions were posed guiding my research for solution to the each problems:
1. How does globalization affect industrial growth in Nigeria?
2. How has export affect the industrial output in Nigeria?
3. Why is the rate of globalization in industrial growth of Nigeria very low?
1.4 OBJECTIVE OF THE STUDY
The main objective of the study is to investigate the impact of globalization the industrial growth of Nigeria. Specifically, the objective are:
1. To examine the impact of globalization on industrial; growth in Nigeria
2. To determine the impact of export on the industrial performance in Nigeria
3. To examine if foreign investment affects that growth of the Nigerian industries
1.5 RESEARCH HYPOTHESIS
1. globalization has no significant impact on industrial output in Nigeria
2. export has no significant impact on the Nigeria industrial sector
3. foreign direct investment and exchange rate has no significant impact on the growth of Nigerian industries
1.6 SIGNIFICANT OF THE STUDY
The economic relevance of studying the impact of globalization on the industrial growth of Nigeria needs not to
be over emphasized. Globalization has brought rapid change in Nigerian economy that seeks to increase their share of financial and direct investment in the globalization market.
Globalization provides economic independence and triggers competition, stimulating globalization to elevate the living standard of people in the nation that offer themselves to the world trade, “We have moved from a world where the big eat the small to a world where the fast eat the slow” as observed by Klaw Schwas of the Dawob world economic living standard of people have considerably improved through the market growth within the development in technology is not only a stady incrasing demands but also it has led to greater utilization.
The result of the study will also be significant in the following way:
1. though the help of globalization, there has been easy and accessible communication network which
facilitate production, distribution of goods and services both domestically and international
2. Globalization has rapidly improves the social and economic status of women in the developing world. The explanation is based on the fact that in a competitive, globalization world, the role of women becomes even more valuable.
3. Globalization breaks the regressive taboos responsible for discriminating against people on basis of gender, race or religious beliefs and it is an antidote to the intolerant fundamentalism that appear to oppress million of the worlds poorest, globalization offers hope that one day they may enjoy the fruit of the west liberal tradition.
4. Globalization has help in the reduction of likelihood for war between developed nations. It has also help to increase environmental protection in developed nations.
Finally, another factor which is often considered as a positive outcome of globalization is the lower inflation. This is be cause the market rivalry stops the businesses from increasing prices unless guaranteed by steady productivity. Technological advancement and productivity expansion are two other importance of globalization because since (1970s) growing internationals rivalry has triggered the industries to improve increasingly.
1.7 SCOPE AND LIMITATION OF THE STUDY
The study covers the growth of the Nigerian industrial sector between (1985-2011).
The research work has been contained by lack of fund, insufficient data especially on very recent economic performance and limited period of time to get enough research materials.