GLOBALIZATION AND THE NIGERIAN ECONOMY

Brief History of Globalization
Globalization is not a new concept. The interaction between people in different parts of the world has been taking place for thousands of years. A very good example of this interaction is a Silk Road, which connected Asia, Africa, and Europe. Philosophy, religion, language, the arts, and other aspects of culture spread and mixed as nations exchanged products and ideas.
In the 15th and 16th centuries the Europeans made important discoveries such as transatlantic travel and the discovery of the New World-America. This shows that globalization cannot be seen as a new process even though the speed of globalization has increased phenomenally in the last decades. This increase has been facilitated by improved technology in areas of transportation and communication.

Key Words
Globalization, Economy, and Development

Definitions of Globalization
There are numerous attempts by different authors to define the term globalization. Often one particular dimension acts as a key to each of the definition– for instance, a politically-centered definition may underscore the decline of the nation-state and the territorially bounded societies that formed the grounding unit of analysis of modern political science, sociology, and international relations; while economically-centered definitions may underscore capitalism and the expansion of the free-market system as the key mover of globalizing processes.







For some, globalization is best understood as a legitimating cover or ideology, a set of ideas that distorts reality so as to serve particular interests (Barrett, 1991). Thus Schirato and Webb (2003: 199) view ‘globalization’ as a ‘discursive regime, a kind of machine that eats up anyone and anything in its path’. They suggest that ‘globalization functions as a set of texts, ideas, goals, values, narratives, dispositions and prohibitions, a veritable template for ordering and evaluating activities, which is “filled in” or inflected with the interests of whoever can access it’ (Schirato and Webb, 2003: 200).
For others, globalization is a much more ‘material’ reality in the contemporary world. Sometimes, as mentioned, this reality is viewed as dominated by one particular dimension as, for instance, in the following definition from The Social Sciences Encyclopedia (Kuper and Kuper, 1996: 234) which privileges economics: ‘The development of the world economy has a long history, dating from at least the sixteenth century, and is associated with the economic and imperial expansionism of the great powers.
By globalization we refer to a more advanced stage of this process of development’. Langhorne (2001: 2), meanwhile, accents the proliferation of technology: ‘Globalization is the latest stage in a long accumulation of technological advance which has given human beings the ability to conduct their affairs across the world without reference to nationality, government authority, time of day or physical environment’.
For others, a more general definition of globalization is in order. The Dictionary of Social Sciences (Calhoun, 2002: 192) offers the following conceptualization: globalization is ‘A catch-all term for the expansion of diverse forms of economic, political, and cultural activity beyond national borders’. According to Hewlett & Ramesh, (2006, p.175). “It is often used to explain the development of economically underdeveloped countries because it is assumed to help economic growth” (Wohlmuth, 2001, p.20). However, this last statement is not always true as Wohlmuth (2001) himself explains in his book that weaker States are often hindered in their growth because of the effects of globalization.
By using the above definitions we can see that globalization is a network of organizations across nations therefore accentuating the importance of international relations. It has often been seen as a purely economic aspect however, globalization also comprises cultural, political and ideological relations. Although globalization is often used to explain the development of under developed countries, the effects of this concept are not always as positive as may seem (Jelilov, Gylych; Waziri, Fadimatu; Isik, Abdurahman; 2016).
Advantages of Globalization
i). Resources of different countries are used for producing goods and services they are able to do most efficiently.
ii). Consumers to get much wider variety of products to choose from.
iii). Consumers get the product they want at more competitive prices.
iv). Companies are able to procure input goods and services required at most competitive prices.
v). Companies get access to much wider markets
vi). It promotes understanding and goodwill among different countries.
vii). Businesses and investors get much wider opportunities for investment.
viii). Adverse impact of fluctuations in agricultural productions in one area can be reduced by pooling of
Globalization And Nigeria’s Economic Development
Globalization is a very uneven process with unequal distribution of its benefits and losses. This imbalance leads to polarization between the developed countries that gain, and the developing countries that lose out (Obadan, 2001). In this regard, the place of Nigeria in the globalization agenda requires some in-depth study. To begin with, Nigeria is 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 monoculture dependency and unfavorable terms of trade in its export trade as well as excruciating debt and debt service burdens.
Thirdly, before 1986, economic regimes were regulated and the country pursued expansionary fiscal and monetary policies in its development efforts (Obadan, 1998). These problems were exacerbated by political instability and corruption. As a result, investment choices were distorted, which eroded the confidence especially of foreign investors. Following the globalization trend, Nigeria has been liberalizing its economy. But the real sectors have had to function under conditions of unstable macroeconomic management, inadequate technology and credit facilities. These have proved to be an obstacle to strengthening the productive base, especially of agriculture and industry, in order to make them export oriented. Thus, in spite of the openness of the economy, external trade performance has not been encouraging.
A study shows that oil exports dominate Nigeria’s foreign trade by 80 per cent. Food, agricultural raw materials and manufactures accounted for only 1 per cent of total export in 1990, but this fell to 0 per cent in 2000. In between that period, the country never exported ores and metals (World Bank, 2002). As a monoculture exporter, over 80 per cent of Nigeria’s exports is made up of crude petroleum. But instability in the world oil market sometimes negatively affects oil exports, leading in such circumstances to declines in foreign exchange earnings.
This partly explains the country’s recourse to external funding in order to meet its development challenges. But external borrowing exposes Nigeria to indebtedness, which reached 29.8 billion dollars in 2002. The servicing of this debt depleted the national treasury by 1.2 billion dollars out of 10.7 billion dollars foreign exchange earned that year (Central Bank of Nigeria, 2002). Even more worrisome is the ratio of this debt to gross domestic product (GDP) and export earnings.In 1985, the total debt stock was 710 billion naira, which corresponded to 1 per cent and 6 per cent of GDP and export earnings respectively. In 2001, the country’s external debt had risen to 3.2 trillion naira, which was 56 per cent of GDP and 633 per cent of export earnings (Jelilov, 2015).
Financial market liberalization also exposes the country to volatility and shocks. Yet, access to credits is granted to the country under strict conditionality. Moreover, the shortfalls in servicing Nigeria’s debt have led Export Credit Guarantee Agencies (ECGA) to suspend insurance cover for export of goods, services and investment to the country. Nigerian importers are also required to provide 100 per cent cover for all their order.
As such, they are placed at competitive disadvantage to those who have access to ECGA covers and import credit facilities (Debt Management Office, 2001). This situation exacerbates the pains of the external debt and hampers the inflow of foreign resources needed for the stimulation of investment and growth.
FDI inflows to Nigeria amounted to 588 million dollars in 1990. This rose to 1,079 million dollars in 1995, but declined to 930 million dollars in 2000 (UNCTAD, 2002b). Worldwide FDI in 2001 were 823.8 billion dollars and Nigeria attracted only 1.1 billion dollars or 0.13 per cent of that amount. Although global FDI declined to 651.2 billion dollars in 2002, Nigeria increased her share to 0.19 per cent of such investments as she attracted 1.3 billion dollars of FDI that year (UNCTAD, 2003b). However, that share is meager and it is explained by the peripheral position of the country in the financial and profit calculations of industrialized nations and the country’s marginalized status within the orbit of modern capitalism.
At the moment the role of Nigeria in the global economy is being the exporter or raw materials, especially crude oil, and importer of finished goods from the West. In this connection, Stewart (2002) maintains that the need of developed nations to sustain the import capacity of peripheral economies in order to facilitate continued production and maximize profits at the center explains why in the periphery countries raw material exports are encouraged. In that event foreign exchange receipts are low, which makes external loan contraction inevitable for social and economic development.
Globalization refers to the increasing integration among nations which has accelerated sharply over the past half a century, driven largely by the remarkable expansion in international trade and extra ordinary advances in information and communication technologies (Ojeka, 2004:14). Globalization is the term used to describe the growing worldwide interdependence of people and countries. This process has grown tremendously in the past decade largely because of huge innovation in technology (Adejo, 2003). During this democratic dispensation, globalization has been made possible because divisive blocs of the cold war have virtually disappeared. Trade barriers have been gradually eliminated and travel has become cheaper and easier.
The features of globalization include interconnection of sovereign countries through trade and capital flow; harmonization of the economics rules that govern the interaction of relationship between these sovereign nations, creating structures to support and facilitate dependence and inter connection; and creation of a global market place (David 1997). Although globalization has helped increase growth and wealth in recent years, it has not done so for all the countries. Despite the positive results of globalization, many people still fear that the harmful effects outweigh its benefits. Development refers to the capacity of National economy, whose initial economic conditions have been more or less static to generate and sustain an annual increase in the Gross National Product (GNP) at rates of 5 – 7 percent or more. The term Economy refers to an organization of money and other resources for the well-being and development of man. Economic Development refers to the improvement in the general standard of the people in the society.
The benefits of globalization have not been evenly distributed. Disparities between the rich and poor countries as well as within many countries have increased. Today, more than half of the world’s 6.6 billion people still live below the poverty line. The persistent abject poverty and other related problems including those posed by the volatility of International capital flows have been a matter of serious concern.
Positive Effects of Globalization on Nigerian Economy
The positive effects of globalization to the Nigerian economy include:
1) Increased specialization and efficiency
2) Better quality of products at reduced price
3) Economics of scale in production
4) Competitiveness and increased output
5) Technological improvement and increased managerial capabilities.
6) Trade and investment which can boost efforts at restructuring an economy to make it more competitive and better.
7) Communication and mass media which have the traditional function of multiplying mobility and facilitating exchange of information about goods and services.
8) Exhibition, trade fair and media advertising which has helped in marketing of goods services. This has enhanced e-commerce.
9) The modern banking system through electronic banking (e-banking) and automated teller machines.
10) E-mail, text messages which have replaced posting of letters, online registration of Examination e.g. WAEC, NECO etc and the development of DSTV which have enabled Nigerian to watch programmes e.g. football matches from far away countries. However it is important to mention that globalization calls for innovative, dynamic and committed management.







Negative Effects of Globalization on Nigeria Economy
1) Globalization has caused in most cases, developing countries like Nigeria to live at the mercy of the super powers of the developed countries in terms of military economic manipulations, and even Health as in the case of Ebola treatment drugs.
2) The concept discredits indigenous cultures, values, knowledge and experience.
3) It undermines national economic and political independence and creates to some extent international dispantries.
4) The trade regime in advanced economics most times generally discriminate against the goods that poor countries produce e.g. food, textile and clothing.
5) Nigerians underdevelopment and impoverishment is the direct aftermath of the European colonization, global capitalist exploitation and ruthless extraction of resources.
6) In Nigeria, life expectancy is about 51 years and is increasingly being reduced with low calorie intakes, poverty, uncertainty, hardship, robbery, tribe wars etc. (Claudia, Diana 2012)
7) Nigeria as a component part of the world, experience global warming resulting from emission of gases from exhausts, chimneys which depletes the diatomic molecule – ozone
8) Policies of deregulation, privatization and commercialization packaged by the International Monetary Fund, the World Bank and the world Trade Organization, do not take into account, the economics peculiarities of Nigeria. This effect automatically weakens a country’s sovereignty.
9) Globalization does not seem to be giving us much in terms of technological transfer, industrialization and economic development in general.
10) The mass importation of electronic communication and military gadgets without commensurate exportation of Nigerian goods as compensation has left Nigeria in unfavourable terms of trade and deficit balance.
11) The Boko Haram Insurgent Group – this is a domestic terrorist group that is propelled by a clearly – defined strategic outlook with the ambition to Islamize the Nigeria States. The group is inspired by other terrorist groups as a result of the negative effect of globalization. (Christian et al 2013)
12) Loss of biodiversity - A profound reduction of genetic diversity in Agriculture is another effect of globalization. Agricultural products directly affect the economic status of the country. The impact of globalization has had a bad influence on our wild varieties of food plants.
13) It also causes interferences on personal and National privacy. The critics of globalization believe that free International trade in goods and financial assets does more harm than good. They view it as a vehicle for enriching corporate elite, to the detriment of poor people and the environment. On the other hand, the supporters of free international trade think that globalization holds the key.
The Effect of Globalization on Nigeria Economic Development
Some of the effects of globalization on the Economic Development of Nigeria include: -
1) Economic Stagnation - The experience of post-independent. Africa generally demonstrates quite clearly that like other developing countries, it is not catching with the advanced economics. As long as Nigerian continues to open up her economy in competition with all the other advanced countries in the ‘global market’ economic stagnation will be experienced. This situation will continue to worsen because of Nigeria’s weak economic capacity.
2) According to Kabir Haruna (2012), the determination of petroleum prices by market forces had done Nigeria more harm than good, besides it is absurd to deregulate (as cited by globalization) a scarce commodity. This has made the independent marketers constitute a cartel that dictates terms in market. And like the government, the marketers had created artificial scarcity periodically to influence prices. The Nigeria economy is weak and dependent. The issue of deregulation and market forces has much to do with efficiency. It is vital to be handled by the private enterprise.
3) On the sustainable industrial agriculture, globalization is reducing the incomes of the third world country like Nigeria through a combination of devaluation of currencies, increase in cost of production and a collapse in commodity prices.
4) In the area of trade, the share of primary commodities in the world experts of items such as food and raw materials have declined relatively in recent time for the developing countries such as Nigeria. Importing foreign goods, without having its own demanded and purchased by other countries in reciprocal manner, leaves the country at a disadvantage.
5) Adoption of liberalization in trade and investment as a way of integrating into the global economy is another effect of globalization on the Nigeria’s economy. This situation opens the country’s economy to competition with other stronger economic in the world. As a result, it increases the exploitative tendencies of the stronger countries.
6) Hardship on the Majority of the Population: - With regard to withdrawal of subsidies in the economy and drastic reduction of social service spending, hardship has come over the majority of the population who are workers, peasant farmers, market woman, students etc. such measure on the part of government has brought about a sharp increase in the prices of electricity, water, transport services, health services etc. by extension, it also generates massive unemployment and a drastic fall in real wages.
7) Insecurity: - The effect of globalization with regards to security as in the case of Boko Haram brings about uncertainty and fear. Industries and professionals are unable to function properly. Nigeria as a developing country has not evolved a mechanism that can absorb the shocks generated by the effects of globalization.
8) Urban-rural Migration: - Regarding the movement of people from the power zones to the richer zones, it is noted that there is an increase in the number of workers who migrate to the developed countries in search of better paid job opportunities, and as a result many, in the Third World blame the poor home economic situation on adverse effects of brain-drain incidence in developing countries.
Recommendations
It obviously remains a challenge to every developing country to gear up and develop the capacity to confront. However the following are the recommendation for sustainable development in Nigeria in the face of globalization
• The new democracy must go beyond party politics to include civil society grassroots initiatives.
• Subsidiary or decentralization through globalization i.e. local ownership and control of resources.
• Ecological sustainability i.e. exploiting natural resources for present generation without damaging, the environment thereby preserving resources for future generation.
• Diversity of global system needs to be respected and preserved in its cultural and economic forms.
• Common heritage resources and services like water, land, air, forest etc need to be protected from co modification and unbridled privatization.
• Jobs, livelihood and employment are rights which must be protected and guaranteed in sustainable society.
• Food security and safety means that, communities and nations are stable and secure when they produce their own food. Therefore agriculture has to be place on top priority list. This sector is capable of providing job opportunities to over 70% of the Nigerian population.
• For better economic development, Nigeria has to participate in the decision making processes of the global institutions whose policies are imposed on her rather that only acting as a facilitator.
  • References
    Adejo, A. (2003) “Roots of Globalization: A historical Review” Journal of  Globalization and International Studies. Vol 1. Makurdi, Aboki Publishers.
    Christian Iheanacho Agboti et al (2013): “Globalization and the Boko Haram Insurgency: Implications for National Security in Nigeria”. A Multi Disciplinary Journal of the Graduate School, University of Uyo,Nigeria.
    Claudia, Diana POPA (2012): “Is Globalization a necessary Evil? Side effects of the Globalization” International
    Journal of Academic Research in Accounting, Finance and Management Sciences, Volume 2, PP 243 – 250.
    David (1997) “The Political Economy of Privatization of Public Enterprises in Nigeria”. African Review, No. 15.
    Kabir Haruna Danja (2012): Globalization and the Challenge for Nigeria’s Development. Microeconomics and Macroeconomics PP 12-19.
    Ojeka, J. M. (2004) “Globalization and the Third World Countries”. Article in the Sign Magazine, PP 14
  • http//en.wikipedia.org.wiki/globalization.
  • Ubam R. E, WilcoxR. A (2016), Review of the Effects of Globalization on Nigeria Economic Development . International Affairs and Global Strategy www.iiste.org, ISSN 2224-574X (Paper) ISSN 2224-8951 (Online)
  • Felix U. K(2016) , Impact of Globalization on Nigerian Economy, Pyrex Journal of Business and Finance Management Research, Vol 2 (10) pp.109-121, http://www.pyrexjournals.org/pjbfmr, ISSN: 2985-8860
    AbdulRaheem. Y (2003): Globalization and Nigerian Economic development.
    Dani, .R. (1999). Is Globalization gone too far? Washington, D.C Institute for International Economics.
    Bokhari.S and Fabrizio.D.D: Research paper on Economic Development through Globalization in Nigeria.
    History of Economic Thought, (2008): Economic Development, the History of Economic Thought Website, UK.
    Jelilov, G. (2015). An Outlook of the Recent Entrepreneurship and
    Economic Problems in Nigeria: An Expatriate Perspective.British Journal Of Advance Academic Research, 78-85.
    Jelilov, G. (2016). The Impact Of Interest Rate On Economic Growth Example Of Nigeria. African Journalof Social Sciences, 51-64.
    Jelilov, G., Kalyoncu, H., & Isik, A. (2015). Currency Substitution: Evidence from Nigeria. The Empirical Economics Letters, 737-744.
    Jelilov, Gylych; Abdulrahman, Samira; Isik, Abdurahman; (2015). The Impact of Tax Reforms and Economic Growth in Nigeria. The Empirical Economics Letters, 1100-1115.
  • Jelilov, Gylych; Chidigo, Mary; Onder, Evren. (2016). Firm Size and Firm Growth: Testing Gibrat’s Law on 17 Nigeria Manufacturing Industry (2000-2011). The International Journal of Social Sciences and Humanities Invention, 1869-1879.
  • Jelilov, Gylych; Onder, Evren; (2016). Entrepreneurship in Nigeria Realities on Ground. Pyrex Journal of Business and Finance Management Research, 006-009.
    Jelilov, Gylych; Waziri, Fadimatu; Isik, Abdurahman; (2016). Interest Rate Behaviour and its Relationship with Economic Growth in Nigeria: An Error Correction Model Approach. The Empirical Economics Letters, 245-255.
    Merkel.A (2007) Globalization: Grasping opportunities and minimising risks, Federal Government of Germany .
    http://www.bundesregierung.de/nn_6516/Content/EN/Artikel/2007/04/2007-04-25- merkel-g8-business-summit__en.html
    http://cepa.newschool.edu/het/schools/develop.htm
    Ekundare, O: (1976): An economic history of Nigeria 1860-1960, New York, Africana Publisher
    Ogboru.I (2000): Globalization and its Attendant Consequences on Nigeria’s Development.
    Ibrahim.M.J: Research paper on the Effect of Globalization on Developing Countries.
    Omoyibo.K.U and Ajayi.B.I (2011): Research paper on The Impact of Global Capital on Nigeria Economy
  • Jelilov, Gylych; Kachallah Ibrahim, Fatima; Onder, Evren. (2016). anAppraisal of the Impact of the Dearth of Pre-Hospital Emergency Medical Services to Road Traffic Accident Victims in Nigeria. International Journal of Humanities and Social Science Invention, 34-40.Konyeaso. 121
    Jelilov, Gylych; Muhammad Yakubu, Maimuna; (2015). Economic Growth and Energy Consumption in Nigeria. The Empirical Economics Letters, 1187-1196.
    Jelilov, Gylych; Musa, Muhammad; (2016). The Impact OF Government Expenditure On Economic Growth In Nigeria. Sacha Journal Of Policy And Strategic Studies, 15 - 23.
    Jelilov, Gylych; Onder, Evren. (2016). Entrepreneurship: Issues and Solutions Evidence From Nigeria. Pyrex Journal of Business and Finance Management Research, 10-013.

SHARE