IMPACT OF GLOBALIZATION ON THE GROWTH OF NIGERIA ECONOMY

IMPACT OF GLOBALIZATION ON THE GROWTH OF NIGERIA ECONOMY

Background to the Study

Trading is an essential component of all multinational businesses, whether they operate in a single country or on a worldwide scale. Goods are manufactured in one nation, distributed in another, and transported across borders to enter the target market's distribution chain (s). Most countries regulate the movement of products across their borders, whether they are leaving (exports) or entering (imports) (imports). Tariffs and quotas are examples of basic export and import documents (Aimiumu, 2018; Adesoye, Ajike & Maku, 2015). They are restrictions on the free flow of products between independent sovereignties and must be addressed by either the exporter or the importer, or both. Trade barriers are reduced or removed in order to promote excellent trading relationships between countries and the free movement of products, services, and human capital, a process known as economic globalization or globalization.

Globalization can also be defined as a process of worldwide integration resulting from the flow of global ideas, product perspectives, and innovations (Omojolaibi, Mesagan & Nsofor 2016). It is the increased cross-border commercial and financial and foreign direct investment flows among nations, facilitated by rapid improvements in and deregulation of communication and information technologies (Aninat, 2002). It conjures up images of a borderless society with greater economic integration that raises people's living standards all around the world. It can also be viewed as the spread of numerous cultural values and experiences around the world (Baylis & Smithm, 2017). The preceding demonstrates that globalization is the international integration of economies through commerce, financial flows, and broad adoption of information technology and internetworking. As a result, the world is becoming increasingly integrated and interdependent in terms of international trade management, administration, communication, investment, and finance.

The Nigerian Enterprises Promotion Act, which had previously limited the amount and limits of foreign participation in several areas of the economy, was abolished in 1995 in accordance with globalization policy. The Nigerian Investment Promotion Commission Decree and the Foreign Exchange (Monitoring and Miscellaneous Provisions) Decree, both issued in 1995, are the main regulations governing foreign investments presently. In addition, the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decrees of 1994 were enacted in response to the need to stabilize the banking and financial sectors and promote confidence in these key institutions. The Investment and Securities Decree was also enacted in order to modernize and combine capital market laws and regulations into an unified code (Feridun, Olusi & Folorunso, 2016).

Nigeria's present policy orientation is thus based on directed economic deregulation, as seen in most parts of the world and, indeed, in globalized economies. Today, the Nigerian government is disengaging from private-sector activities, leaving government to play the role of facilitator, focusing on the provision of incentives, policies, and infrastructure required to strengthen the private sector's role as the engine of growth (Feridun, Olusi & Folorunso, 2016). In line with globalization policy, the Nigerian government's economic policy aims to increase private sector participation, generate productive employment and raise productivity, increase exports of locally manufactured goods, improve technological skills and capability in the country, attract foreign direct investment, and thus promote economic growth.

Economic growth, according to Ilegbinosa (2018), is a source of improved living standards and may be defined as a rise in a country's gross domestic or national product (GDP/GNP) through time, which eventually leads to high income per capita. Economic growth or gross domestic product (GDP) is also referred to as aggregate demand in the Keynesian approach to determining national income. Economic growth is defined as the increase in a country's potential GDP or output. GDP has been the most widely used indicator of economic success and market expansion.

Technology, policy liberalization, and competition across national boundaries are all made feasible by globalization. This is demonstrated, for example, by developments in computing technology, which allow traders to satisfy demand for financial instruments like swaps and futures with relative ease, allowing them to better control their risks. Furthermore, advances in transportation, such as the introduction of containerization in land– and sea–based shipping, have reduced both handling requirements and transit time by more than two-thirds. Policy liberalization is the second driving force. Most governments have done this by removing trade barriers and regulations on the flow of capital and services, allowing market forces to play out. The third force, increased competition, forces businesses to look for new ways to improve efficiency, such as shifting some of their operations overseas to save money (UNCTAD, 2002a; United Nations Development Programme, 2016).

However, not every country is a full participant in the global village. The developed countries use their competitive advantage to increase their share of global trade and finance, and thus benefit greatly from globalization (UNCTAD, 2003a). On the other hand, underdeveloped and developing countries may suffer as existing imbalances and distortions in the global economy worsen (Collier & Dollar, cited in Onwuka & Eguavoen, 2017). Zuma (2016) agrees, arguing that the unequal distribution of political, economic, and military power has resulted in two contrasting global villages: one that is indeed prosperous, rich, and democratic for a few who live in it, and the other in which the majority is poor, alienated, and marginalized with little voice to determine their own destiny. As a result, without empirical validations, the impact of globalization as a driver of economic growth is all-inclusive.

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