The Implication of Globalization for the Nigerian Economy
Background to the Study
There have been phenomenal metamorphose in virtually all aspect of society the world over, Communication have become more rapid, working patterns are changing, markets for goods and services have transformed immensely and money can be moved freely and instantaneously from one country to another with little or no hitches at all. Again, the ace of change seems to have accelerated sharply since the end of the cold war and the emergence of the New World Order (NOW), characterized by unipolarity. This development is called “globalization”. Through the term is relatively new, the process is an old one. The globalization process has been defined by Camdessus (2001:2) as “The growing economic interdependence of countries worldwide through the increasing volume and variety of cross-border transactions in goods and services and of international flow of capital through the more rapid and widespread diffusion of technology” More so, Woodward (1996:16) sees globalization as the rapid integration of trade relations productive and investment decisions across the globe.
The economic agents who employ investment capital and technology around to take advantage of environments where their competitive edge can manifest in high returns to accomplish this.
Globalization is therefore a very complex phenomenon. In this light, Nnoli (2002:174) associates it with “the increasing concentration of power and influence over the world economy by groups of corporations, international financial institutions and countries”, globalization interfaces with variations, uncertainties and incompatibilities. Its manifestation and effects are not uniform and unpredictable.
Furthermore, the most important and unique feature of the current globalization according to (Khor, 2000:4), is “the globalization of national polices and policy making mechanisms”. This has therefore led to the erosion of national sovereignty and narrowed the ability of governments and people to make choices from options in economics and all other aspects of national life. Most developing countries have therefore seen their independence policy-making capacity eroded and have to adopt policies made by other entities which on balances have been detrimental to the countries conceived. In other words, the World Bank, International Monetary Fund (IMF) and World Trade Organization (WTO), have become major makers of an increasingly wide range of policies that were traditionally under the jurisdiction of national governments. Governments, especially of the developing countries, now have to implement policies that are in line the decisions are rules of these international financial institutions. This process of globalization has therefore created and perpetrated dependency in the former colonial territories.
The inescapable truth, according to Toyo (2000:10) is that “globalization is neo-colonialism”. The reason for such an assertion include that lack of tangible benefit to most developing countries like Nigeria, the economic looses and social dislocation, the growing inequalities of earth and opportunities arising from globalization and other problems associated with and made worst by the working of the global free market economy. The history of Nigeria’s political economy, on the other hand, explains to a larger extent how she participated in the globalized international system. As Okpe (2000:50) submits, Nigeria is marginally significant in the global economy. The reason for this is that the scope and magnitude of the crises of dependence and underdevelopment which faces the country has denied it the opportunity to take it rightfully place in the progress of humanity. This dependency status has therefore placed Nigeria into a tight corner where she can hardly reap the net benefits of globalization.
This work focuses generally on the process of globalization but specifically, as it affects the economy of Nigeria. In spite of the accelerated gains of economic globalization, the Nigeria economy seems not to be benefiting from the process, but rather perpetually dependent. This work therefore sees to investigate the problems and prospects of Nigeria economy in a globalized international system.
statement of the Problem
Globalization seen to the phenomenal increase in the socio-economic and political integration of nations of the world both nationally and supra-nationally, again, there has been an apparent celebration of the gains and benefits of globalization by its proponents in the countries of the North, but a contended by Scholars of the South, do not benefit significantly from the gains and opportunities of globalization.
There is no gain saying the fact that the Nigerian economy is in crises. The economy has been under developed, distorted and disarticulated by the same forces of capitalism, which are propagating globalization today. The economy lacks the capacity to compete favourably and adequately in the globalized economic system. The researcher is therefore constrained to ask;
- What does globalization mean to a developing national like Nigeria?
- What is the nature of economic relations in the global economic system?
- Has Nigeria participated significantly in the global economic system?
- Has Nigeria made the sustained independent economic policies under globalization?
- What is the impact of globalization on Nigeria?
- How can Nigeria become a significant stakeholder in the globalization process?
The effort in this research work is to answers to the above questions which constitute work is to answers to the above questions which constitute our problem.
Objective of the Study
The purpose of every scientific research is to discover new data even to investigate an already know fact; and to add to the existing knowledge. Thus it is only when the researcher has come to terms with himself about what he wants to do that the objectives of this study is to examine the positive and or negative effects of globalize on the Nigerian economy. Specifically, the study will among other things;
- Examine the nature and character of the current economic globalization.
- Examine the implication of globalization for the Nigerian economy. Examine how best Nigeria can minimize costs and maximize the benefits of globalization.
- Explain globalization as the same process that has underdeveloped Nigeria and created dependency in Nigeria since colonialism.
- Contribute to the existing knowledge and literature about the nature and character of globalization as it affects Nigeria.
It is usual in a scientific research to make a tentative proposition or hypotheses about the empirical relationship between the variables. Such an informed guess or conjecture provides a clear guide for the collection of data that may agree or disagree with the hypothesis. This will also help to provide a focused research. This will also help to provide a focused research. More so, the independent variable in this research is globalization, while the dependent variable is the Nigerian Economy.
Globalization is an imperialist policy meant to further underdeveloped poor countries like Nigeria.
Nigeria’s participation in the global economic system has been insignificant and marginal. Nigeria have not been able to make and sustain independent economic policies under globalization. Globalization has created and perpetrated a dependent economy in Nigeria. These propositions will guide the researcher to streamline the collection of data that will address the research problem.
Significance of the Study
The pervasive nature and character of globalization and its glorification to the status of a panacea especially by the developed countries of the North has made it more interesting as a case study. Globalization has its tentacles in almost all dimensions of human life. Thus for a nation to be termed developed in this epoch such development and growth will be measured by how the nation accepts and adapts to the principles of globalization.
The significance of this work is therefore underscored by its objective to answer the questions posed in our statement of the problem. This is so because the question will identify economic problems of Nigeria and the answers and solutions proffered will help in solving them. Again, the work is significant because it draws attention to the subtle nature of globalization and the deepening economic underdevelopment and dependency perpetuated by globalization.
The work is also important because the recommendations made will be useful to policy makers especially on how to face inescapable economic reality. The study is also significant due to the fact that it add to the existing literature on globalization and the Nigeria economy especially on how the two relate.
Finally, the study will help other researchers in carrying out further studies in the areas by providing them with background information.
Scope and Limitations of the Study
This study is focused on the globalization process as it affects the Nigeria economy. It will examine the strengths, weakness, and opportunities and threats of the Nigerian economy in a globalized economic order. By the mid 1980s, Nigeria embarked on the IMF and World Bank Imposed Structural Adjustment Programme (SAP), as a result, economic policies in Nigeria are tailored along the guidelines of these Bretton Woods Institutions. In this light, this study will cover the Nigeria economy from 1986 to 2006, the period under which Nigeria has been under serious economic crises.
This research work relies mainly on secondary sources of data. These sources will provide relevant information from textbooks, magazines Academic Journals, Newspapers, Internet, material and unpublished works. This method of data collection is known as content analysis. It entrails the review of works written by scholars, policy makers etc. All secondary data gathered will be reviewed and analyzed in conformity their relevance to the subject.
Dependency is submitted by Offing (1980:53), is a situation that the history of colonial imperialism has left and that modern imperialism creates in underdeveloped countries. He also asserts that dependency is a conditioning situation in which the specifics histories of development and underdevelopment transpire in various societies. To Hoogvelt (2001:38), dependency is created as a result of penetration by colonial capital. Thus a distorted structure which would reproduce overall economic stagnation and extreme pauperization of the masses for all times. Consequently, dependency implies that the development alternatives open to the dependent nation are defined and limited by its integration into the functions within the market. Thus the dependent nations must make choices in a situation in which they do not set the terms nor parameters of choices. In Ake’s (1981:55) perspective, an economy is dependent to the extent that its position and relations to other economies in the international system and the articulation of its internal structure make it incapable of auto-centric development.
According to Ake (1996:125), development is the “process by which people create and recreate themselves and their own choices and values”. More so, Nonsin (2001:52) asserts that development in this direction entails fundamental changes in the institutional and ideological apparatus of society and the strengthening of these so that members of society would develop the capacity for autonomous and efficient management of their affairs for their own welfare and happiness.
The economy of all counties, according to Onwuka and Idehai (1996:80) refers to the complex of individuals and organization which produces goods and services at an ever increasing tempo, except in time of crises, thereby leading to the satisfaction of wants.
Globalization is defined as increasing integration of nation’s economics with the rest of the world. According to Shonekan (2000:23), its features are economic integration through trade and capital flows (Investment) increasing adoption of common relations between sovereign nations. Afolayan (2002:23), see globalization as the intensification of global interconnectedness and intensification”. This blurs national borders and policies in the shadow of global relations. It implies that globalization is a process in which the world’s countries and their economics are cross–border economic activity; it is not only the integration of world economics but other dimensions of world life, technology, governance, social development and culture across national borders.
Globalization seems to be slipper and elusive concept. This is because it is used to refer variously to a process, a policy marketing strategy, a predicament or even an ideology. Thus it is not a single process but a complex processes, sometimes overlapping and interlocking processes but also at times contradicting and oppositions ones. To Ohmae (1989:29), globalization is a borderless world that, it does not only refer to the tendency of traditional political borders, based on national and state boundaries to become permeable, it also implies that divisions between people previously separated by time and space have become less significant and are sometimes entirely relevant. Scholter (2000:19) argued that globalization is linked to the growth of supra-territorial relations between people, a reconfiguration of social space in which territory matters less because an increasing rage of connections have a trans-border character.
Organization of the Chapters
Chapter one consists of the background, statement of the problem, objectives of the study, research questions, significance of the study, scope and limitations of the study, research methodology, conceptual clarification and organization of chapters. Chapter two contains the literature review on globalization and dependency in Nigeria, and theoretical framework. Chapter three talked about the Nigerian state, and the state of Nigerian economy. Chapter four discuss the nature and characters of economic, globalization and economic reforms in Nigeria between 1999 and 2006, partnership for African development (NEPAD) and Nigerian economic development, effects of globalization on Nigerian economy while chapter five contains summary, conclusion and recommendations of the study.