GLOBALIZATION AND ITS EFFECT ON THE NIGERIA ECONOMY

- Compiled and Written by FEresources (April 2017)
 
Globalization is the tendency of investment funds and businesses to move beyond domestic and national markets to other markets around the globe, thereby increasing the interconnection of the world. Globalization has had the effect of markedly increasing international trade and cultural exchange.
Globalization refers to the free movement of goods, capital, services, people, technology and information. It is the action or procedure of international integration of countries arising from the conversion of world views, products, ideas, and other aspects of culture, (Albron, Martin and King, 1990).

Globalization is a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology. This process has effects on the environment, on culture, on political systems, on economic development and prosperity, and on human physical well-being in societies around the world.

From all the above definitions, we can simply say that Globalization are the movement, interaction and integration, either free, subsidized or fully paid for, of goods and services, capital and investment funds, technology, culture and people.

In economics, globalization is the increasing economic integration and interdependence of national, regional, and local economies across the world through an intensification of cross-border movement of goods, services, technologies and capital. Whereas globalization is a broad set of processes concerning multiple networks of economic, political, and cultural interchange, contemporary economic globalization is propelled by the rapid growing significance of information in all types of productive activities and marketization, and by developments in science and technology.

Economic globalization primarily comprises the globalization of production, finance, markets, technology, organizational regimes, institutions, corporations, and labour. While economic globalization has been expanding since the emergence of trans-national trade it has grown at an increased rate due to an increase in communication and technological advances under the framework of general agreements on tariff and trade and World Trade Organization, which made countries gradually cut down trade barriers and open up their current accounts and capital accounts.
The impact of Globalization in the world are Economic Growth and Poverty reduction, Global supply chain, Labour Unions, Capital Flight, Gender (in)equality, Health risk, Mistreatment, Tax Havens, Cultural effects, Migration amongst other not listed.

Some of this has their particular effect on the Nigeria economic, these are stated below;

1.    Nigeria is economically weak due to inadequate domestic economic capacity and social infrastructure needed to boost the country’s productivity, growth and competitiveness.

2.    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.

3.    The challenge faced by Nigeria with regards to Political instability and corruption has led to Capital flight.

4.    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

5.    In spite of the openness of the economy, external trade performance has not been encouraging.

6.    Financial market liberalization also exposes the country to volatility and shocks.

7.    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.

8.    Resources of different countries are used for producing goods and services they are able to do most efficiently and brought into Nigeria. This allow us keep abreast latest in fashion and technology.

9.    Consumers to get much wider variety of products to choose from and get these products they want at competitive prices.

10. Local and indigenous companies get access to much wider markets (regional and international)

11. It promotes understanding and goodwill between Nigeria and other countries.

12. Developed countries can stifle development of undeveloped and under-developed countries, a category which Nigeria currently falls under.

13. Economic depression in one country can trigger adverse reaction across the globe.

14. It can increase spread of communicable diseases. A very clear example of Ebola, Zika virus, Sars amongst others.

15.  Companies face much greater competition. This can put smaller companies, at a disadvantage as they do not have resources to compete at global scale.



















1.    Babones, Salvatore (15 April 2008). "Studying Globalization: Methodological Issues". In George Ritzer. The Blackwell Companion to Globalization. John Wiley & Sons. p. 146. ISBN 978-0-470-76642-2.

2.    International Business. Oxford University Press, Incorporated. 2009. ISBN 978-0-19-568909-9. |first1= missing |last1= in Authors list (help)

3.    Gao 2000, p. 4.

4.    James et al., vols. 1–4 (2007)

5.    School, Harvard Law. "Intergovernmental Organizations (IGOs) | Harvard Law School". Harvard Law School. Retrieved 2016-12-19.

6.    Albrow, Martin and Elizabeth King (eds.) (1990). Globalization, Knowledge and Society London: Sage. ISBN 9780803983236.
7.    AbdulRaheem.Y (2003): Globalization and Nigerian Economic development. Dani, .R. (1999). Is Globalization gone too far? Washington, D.C Institute for International Economics.
 

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