Globalization And The Problems Of Socio-Economic Development In Nigeria
This study examined the globalization and the problems socio-economic development in Nigeria. The researcher therefore, reviewed the existing literature on the implications of globalization on the socio-economic development of Nigeria. Thus, the concept of globalization as well as some components of Nigerian’s developmental strides and its impact on the third world economy was critically examined. The study adopted ex post facto design utilizing qualitative method of data analysis. Dependency theory was adopted in the analysis of the study. The study concluded that if necessary measures are not put in place to ensure the attainment of self-reliance, Nigeria may be excluded in this process and globalization of poverty rather than prosperity and development will be the case for the country. Finally, based on determining implication of globalization on the Nigeria economy, recommendations on the development of Nigerian state to keep pace with globalization trend were highlighted, which includes self-reliance.
1.1 Background to the Study
The concept of globalization has taken a dynamic turn in the contemporary political discourse in Nigeria. It is described as the great economic event of our era. It is also because; it is now bringing unprecedented opportunities to billions of people throughout the world. The rapid growth of information technology and the increased global integration of trade and capital which have had profound consequence for the world economy are resulting into significant shift in the world economy (Francis, 2001). This is because, increasingly, major decisions around the world are given by global competitive pressure. The speed at which the effect of globalization is spreading is growing fast day by day and no nation can afford to be behind if such a nation is to maintain acceptable rate of growth and development (Peter; 2002). It is also observed by Bayo (2000) that the growing impact of two major distinct global trends, which has profound implication on the world economy, are rapid growth of information technology and the increased global trade integration. He notes that these trends are resulting in a significant shift in the world economy. Probably this is why Eduard (2002) notes that the people of the planet of the earth have become one large family. To him, information technology has advanced to a level of rendering distance irrelevant.
Furthermore, he observed that the new epoch offers new challenges and new global problems, such environmental catastrophes, extinction of resources, blood conflict and poverty. The events in the last decade in the global economy suggest a challenge; the utilization of the opportunity engineered by globalization while at the same time managing the problem and tension it poses, for developing countries particularly Nigeria. While some individuals such as Dani (1999) David (1997) and Salimono (1999) opine that globalization opens opportunities, others such as Awake (2002) and Garry (1998) express fear about globalization. Probably it is fear anticipated by the people of the world that in December 1999, a meeting of the World Treaty Organization, held in Seattle, U.S.A was interrupted by riot. The demonstrators feared the effects of globalization on the people and on the planet. Since that time anti-globalization movements have spread across the globe. It is however observed that advocates of globalization have it that it is the panacea to most of the world problems.
It is in the light of the above that this paper concentrates its effort on globalization and Nigerian development; identify the opportunities for wealth creation provided by globalization, as well as the problems and macro-economic volatility and instability in the income distribution and job security. It will go as far as probing on its impact in the Nigerian economy. To a large extent, this research will critical examine in holistic form its utopian formations on third world countries drawing a clear examples on the Nigerian state.
1.2 Statement of Research Problem
Nigeria like other developing countries of the world are characterised by limiting factors of skills, savings and foreign exchange gap. globalization should bring with it, foreign skills and technology to reduce the skills limit by technology diffusion, while investment will reduce the savings limit and equally the foreign exchange limit. The augmentation of domestic savings and inflow of foreign capital can enhance new capital formation and investment for a country. Since the FDI net inflow enhances investment, if sustained, it increases growth, and per capita income.
This subsequently would push domestic savings higher and likewise domestic investment is accelerated, thereby gradually closing the savings gap. This would create a resultant effect of reducing dependence on globalization and thereby bring about development of the economy. However for Africa, the gaps are becoming incessantly wider instead of closing up as experienced by other developing regions like Asia. The desired sustained increase in growth and per capita income is not achieved to lead to increased savings and investment. This will make socio-economic development farfetched, as globalization does not successfully substitute for limited local factors to permit increase in total output. globalization can promote the development of host domestic economic sector, with discipline on macroeconomic policies. The entry of foreign capital increases competition, boosts efficiency, enhances technological advancement, enhances domestic investment and reduces overhead cost. This aids in stimulating economic activities, not only by reason of the foreign investment but also by invigorating domestic investment which further engenders increase in economic activities, thereby ensuring maximal utilization of resources, with the resultant effect of national growth and development. The stimulating environment for development has therefore been inaccessible despite the anticipated prospects, due probably to likely paucity of economic activities, coupled with macroeconomic instability and other social challenges which are peculiar to developing economies.
1.3 Research Objectives
- What relationship exist between globalization and socio-economic development in Nigeria.
- Does increase in FDI lead to socio-economic development.
1.4 Research hypothesis
H0: there is a positive correlation between globalization and socio-economic development
1.5 Scope of Study
This study covers only globalization as it relates to socio economic development in Nigeria. FDI and net per capita income is used to capture socio-economic development in Nigeria, among other variables.
Conclusions and Recommendations
The study has shown that advantages accruing from globalisation to countries in the world largely depend on the level of socio-economic development of the countries. For instance this research work has shown thattrade openness and FDI which are components of globalisation do not exhibit any significant impact on the socio-economic development of Nigeria during the period under review. However , when the result is compared with findings of some authors in the past it was discovered that those studies that used developed economies as their case study found a positive and significant relationship between these globalisation variables that is trade openness and FDI and the socio-economic development of the developed countries under review.
Another conclusion that can be drawn from the findings of this study is that it appears that it is the level of development of Nigeria that will indicate the volume of foreign direct investment that will flow into the country. The same goes for trade openness. The study indicates that the level of development of Nigeria as a country will dictate the level of outward orientation of Nigeria as a country.
A general conclusion that can be made from the study is that Nigeria as a country has not benefited adequately from the gains of globalisation. Further research shows that the reason behind this might not be unconnected with domestic political and economic instabilities that characterised Nigeria economy as a developing country. It also appears that trading partner of Nigeria are gaining more at the expense of the country going by the fact that trade openness is not having any significant impact on the development of the Nigeria..
Considering the findings form the research work the following recommendations are made:
Improvement in the foreign direct investment: The study has shown that net inflow of FDI into the country is grossly inadequate to bring about any meaningful or significant impact of the development of Nigeria. Consequently, effort should be made by Nigerian government to increase the inflow of FDI into the country.
Fractioning out appropriate level of trade openness: There is the need for improvement in trsde relationship between Nigeria and ither countries. Adequate measures should be taken to moderate trade relationship in Nigeria so that Nigeria can be benefiting more from any trade relationship with other countries. This may require trade restrictions in some aspects of production so as to encoursge the domestic industries and promote the real sector of the economy generally.
Using appropriate policy mix that will increase gains from globalisation: Both monetary and fiscal policies variables used in the study fails to have any significant impact on the Nigerian socio-economic development. Therefore, there is the need for appropriate policy measures that will have good synergy with globalisation. This might lead to improvement in gains derived from globalisation by Nigeria.
Development of the real sector of the economy: Improvement of the domestic output is sine-quanon to economic growth. On this note, effort should be made to increase local production. This can be done by putting in place various physical, monetary and fiscal measures that will boost domestic output especially in the real sector of Nigeria economy. This will no doubt promote gains from globalisation in Nigeria.
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