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THE_IMPACT_OF_GLOBALIZATION_ON_INDUSTRIAL_GROWTH_OF_NIGERIA_(1985-2011)

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  • CHAPTER ONE

    INTRUDUCTION
    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,
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    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
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    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
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    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
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    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.
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    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
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    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
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    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.
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    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:
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    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
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    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
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    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.
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    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.

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