EFFECTS OF GLOBALIZATION ON THE NIGERIAN ECONOMY: PROSPECT FOR DEVELOPMENT AND UNDERDEVELOPMENT
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EFFECTS OF GLOBALIZATION ON THE NIGERIAN ECONOMY: PROSPECT FOR DEVELOPMENT AND UNDERDEVELOPMENT
CHAPITRE ONE
1.1 General Introduction
Globalisation is a global and dominant concept in today’s globe. It did not evolve spontaneously, but was manufactured by the world’s leading social forces to fulfil their special interests. It has been mostly driven by the developed world’s interest and requirements.
Globalisation is a technology-driven process that eliminates national frontiers to allow for the free movement of capital technology and services across borders. Transnational Corporations (TNCs), International Finance Institutions, such as the United States, are considered and regarded as providers of current globalisation.
They see globalisation as a “process of economic liberation,” particularly the ease with which trade between countries can take place. Globalisation, they argue, is a natural and unavoidable component of historical development that will eventually boost wealth and prosperity for all countries and peoples while also improving the global economy (Okokie, 2003).
However, these multinational organisations’ activities and operations are characterised by an uneven distribution of possibilities, restraints, and disadvantages.
As a result, the significant inequities and power imbalances among the member states cast considerable doubt on the process’s ability to benefit all equally. This fear is echoed in a UNDP Human Development Report (1996:56),
which defines the process as a “two-edged sword with winners and losers.” The system’s inequitable allocation of income and power is mirrored in the incapacity of the weak (developing countries) to influence global economic and political affairs as losers.
The technologically advanced and powerful industrial economies (developed countries) hold crucial roles in global institutions and are generally responsible for major system decisions, excluding the weak.
As a result, it is a system in which the powerful (developed countries) wield authority with no concern for the rest of the globe, while the weak, powerless, are forced to endure or suffer what they must.
Essentially, writers from developing economies argue and maintain that contemporary globalisation, which has as its primary instruments the reformed Bretton Woods institutions, the World Trade Organisation (WTO),
and the G8 (Group of Eight, consisting of eight large world economic powers, namely: Canada, France, Germany, Italy, Russia, the United Kingdom, Japan, and the United States), is having a negative impact on the development efforts of peripheral capitalist economies.
They specifically stated that the three general policy measures of globalisation, namely privatisation, deregulation, trade, and financial liberation, have left developing economies prostrate, i.e.
As a result, real income in most African countries, including Nigeria, is lower than it was three decades ago; health prospects are worse, and the human poverty index is getting more elastic (Okokie, 2003).
It is important to note, however, that because Nigeria is a third-world country that was colonised by Britain at one point in its history, her domestic economy was incorporated into the global capitalist system to her detriment, at a time when her economy was not prepared for such an advancement.
The rising trends in trade and capital movements were also linked. The increasing need for food and raw materials in Europe and North America encouraged FDI in primary sector enterprises. Thus, commodity exports accounted for more than 60% of foreign commerce at the start and conclusion of the phase, as well as 550/0 of the FID stock in 1914.
Complementary portfolio investment flow sponsored infrastructure initiatives, particularly railway building, in primary produce exporting countries, despite the fact that such investments were meant to facilitate exploitation of these countries rather than to assist them in their development efforts.
Because many of the top core industrial and trading nations were also labor-scarce economies, new growth potential drew significant inflows of unskilled migrants, notably from poorer European countries (Alfred, 2001).
Transnational linkages expanded in the nineteenth century, increasing technology and communication networks. The inclusion of developing countries into the global network took on more significance because it established a new global interdependence into international political economy. European merchants established global commercial networks.
In tropical locations, Europeans founded colonies, slave plantations, and trading outposts to grow or get items inaccessible in Europe, such as sugar, tobacco, coffee, and spices.
This resulted in European and North American industrialization, which significantly boosted the volume and economic importance of international trade (Microsoft Encarta Encyclopaedia, 2002).
Globalisation as a phenomenon is not new. However, the character and fundamental elements have continued to facilitate at a certain historical epoch with the dominant mode of production, exchange relations, and societal proclivities and preferences.
Thus, globalisation as a process has been present from the days of empires, kingdoms, and chiefdoms to the current state system and has accelerated international interactions over the years (Owugah, 2003).
According to Chakravarthi Raghayan in Third World Resurgence (1999), “the current talk of globalisation and integration since the late 1980s and early 1990s is really an effort of transnational corporations (TNCs) to expand their activities to developing countries.”
And, similarly to the term multinational corporations, which are based in one home country and have management and control, if not all shareholders, from that country, but have branches, subsidiaries, and production units in other countries,
the term ‘globalisation’ is being used to wrap together and hide the reality of the current stages of the TNC’s activities, primarily the attempt at Trans-nationalization of the world, and particularly that of developing countries (Raghayan, 1996).
Nigeria being one of the weakest economies in the globalisation system: due to a lack of modern technology, political instability, a high percentage of unemployment, and so on, the process poses a significant economic challenge to the Nigerian state.
The techniques employed by globalisation institutions, as described previously in this introduction, constitute a major threat not just to Nigeria’s economic development, but also to the country’s total development, politically, socially, and culturally.
1.2 Statement of the Problem
One of Nigeria’s issues is figuring out how to develop economically to the point where she can compete effectively in the global market. With the IMF, World Bank, and other globalisation agencies calling for the integration of African countries, including Nigeria,
into the “Global Village” and the implementation of all developmental strategies (policies) such as privatisation, trade liberalisation, currency devaluation, and structural adjustment programme (SAP), it is expected that Nigeria’s economy will grow rapidly, but the opposite is true.
The problem statement is: what has made Nigeria’s economy underdeveloped after positively subscribing to becoming a member of the global village and applying all developmental policies suggested by IMF and World Bank such as privatisation,
trade liberalisation, democracy, cuncy devaluation, and so on as economic development strategies, or could it be true that “Globalisation is a means through which developed Nations further underdeveloped developing Nations”?
1.3 Research Questions
What are the economic benefits of globalisation for Nigeria?
Has globalisation had any negative consequences in Nigeria?
Is globalisation the criterion for Nigeria’s economic development?
Could there be other avenues for economic development in Nigeria outside than globalisation processes?
1.4 Objectives of The Study
The study’s aims are as follows:
To investigate the economic benefits of globalisation in Nigeria.
To assess the globalisation agents.
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