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Globalization and its impact on the Nigerian Economy By Abraham Onoja

Abraham John Onoja
Abraham John Onoja

You must have come across a phrase which says, “The world is a global village”. This is a phrase which is most likely thrown around during discussions in regards to business as it refers to how much the world has opened up, with boundaries removed, making trade and communications between people in different countries easier.

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Therefore What is Globalization? It can be referred to as a process where people, companies, and governments from different nations interact and integrate through international trade and investments has effects on the environment, culture, political systems, economic development and on the human physical well-being in societies around the world. We are more connected to everyone and anyone around the world. Globalization is not a simple phenomenon nor a uniform process rather, it is a process that is complex and multifaceted. Due to Globalization, global interdependence has increased rapidly.

Globalization has made communication with someone in another country easier. Someone in Nigeria can sell their products to someone in China. Goods can be made and sold all over the world. Companies such as fast food companies such as KFC, Dominos pizza etc are opening outlets everyday around the world. Companies can also operate in any country where production costs are cheaper for them. Set aside the the selling of products, services can also be rendered any where in the world due to globalization. eg A US based company can hire someone here in Nigeria for a job position via the internet. Globalization includes a number of factors which include, rapid technology developments that make communications anywhere around the world possible, political developments such as the fall of communism, and transportation developments that make traveling to anywhere in the world faster and more frequent.

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Apart from the trade aspect of globalization, it is important to also know there is a cultural aspect of it. Different cultures meet and people get to know and understand the various ways of life. Globalization has fostered communication worldwide, as it shrinks the geographical boundaries of all countries into a global village.

Developed nations have been the beneficiaries of globalization as their share of world trade and finance has continually expanded at the expense of developing countries. Developing countries with particular emphasis on the Nigerian Economy , have for years experimented with various development strategies and programmes with the aim of attaining self-reliance from dependence on other countries.

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Nigeria’s economic potential and prosperity is constrained by many structural issues, of which include inadequate infrastructure, limited foreign exchange capacity, tariff and non-tariff barriers to trade, Currency devaluation and obstacles to investment.

Inflation, unemployment, and other vices continue to be on the increase, thereby prohibiting foreign trade investment. In the early 1970s Nigeria had made visible progress in closing the income gap relative to advanced economies but the case can not be said of the country today in this era of globalization.

POSITIVE EFFECTS OF GLOBALIZATION ON NIGERIA ECONOMY

– Globalization has allowed for welcoming foreign investments which has helped in providing resources, capital and technology that will support economic development .This paves way and improves employment , increases in exports to a country and thereby improves the current account and therefore will help to the repayment of foreign debt.

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– Globalization has helped to foster smooth modern day banking such as e-banking or mobile banking, Automated Teller machine Services (ATM) and internet banking.

– Through globalization, job opportunities are made available to people from different countries within the globe. This has created the concept of outsourcing.

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– Access to higher learning institutions has been made easier. Today, you can move in search of the best educational facilities in the world without any hindrance.

– Technology is a powerful force that drives the world toward a converging commonality, therefore, due to globalization, there has been an improvement in technologies and increased managerial capabilities.

– Globalization has created and expanded foreign trade in the world. Things that can only be found in developed countries can now be purchased here.

This is done through International trade whereby our country can exports and imports goods within countries. This has allowed for quality products at a reduced cost. It has also led to reduction of tax of importation of goods.

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– Globalization of markets in Nigeria is growing so fast.

This has brought benefits which are economies of scale in production, reduced prices, distribution, marketing and management

NEGATIVE IMPACT OF GLOBALIZATION ON THE NIGERIAN ECONOMY

– In the area of trade, importation of foreign goods is high without having our own demanded and purchased by other countries in a reciprocal manner leaving us at a disadvantage in terms of unfavorable terms of trade and deficit balance.

– Due to globalization in regards to security, the issue of Boko Haram has brought about fears and uncertainties leaving industries, businesses and professionals unable to function properly. Nigeria as a developing country is yet to evolve a mechanism that can handle and absorb this shock.

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– Nigeria continues to open up her economy in competition with other advanced countries in the global market leaving the economy to remain stagnant and if not controlled, it is likely to worsen due to the weak capacity of the economy.

– Globalization has allowed for 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.

In conclusion, as the world moves deeper into the concept of modernization, modernization in every area is becoming the order of the day. The market is becoming more competitive, complex and interdependent because of the nature of the market structure which is now globalized.

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Nigeria has not benefited from globalization due to monocultural export, inability to attract increased foreign investments and indebtedness, therefore the success of complete globalization today cannot be achieved if all the obstacles that hinder economic prosperity are not removed. We need to rethink and review our global philosophies about globalization in order to have a clearer perspective about it.

Despite the rosy picture painted by globalization, Nigeria still remains at the peripheral level with high rate of unemployment and poverty as a form of evidence.

We need to streghten our economy to foster globalization, if we can put in place things that ought to be done, Nigeria could join the league of nations enjoying the benefits of globalization.

 

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