Effect of globalization
Globalization has today become a major sort of debate among academicians, policy makers and NGOs. Its impact is profound.
Some many authors around the world have different views about globalization and so many definitions for it according to their views. But the fact that everyone seems to agree with is that globalization as an impact of both developed and developing economies either in a positive or negative way.
According to Oumar Bouare “globalization is characterized by the intensification of profit seeking abroad by states or businesses through the widening of world markets, the fast processing of information, the reduction in transport cost and time, the improvement and relocation of production units worldwide, and the voluntary participation of countries in the world trading system”.
World leaders also have different view on globalization as president Xi Jinping of china explained in the world economic forum in 2017 that the problem the world is having has nothing to do with globalization and gave examples of the refugee wave from the middle east and north Africa over the years as it has become a global concern arguing that the problem is about conflict and war but not globalization. He also talked about the financial crisis as a consequence of excessive chase of profit by financial capital and grave failure of financial regulations and blaming globalization for the world problem is inconsistent and it will not help solve the problem.
On the other hand, the president of the United states of America Donald Trump speaks very ill of globalization and does not mind starting a trade war changing globalization to localization and bringing back American jobs (Ghemawat, 2017).
Jack Ma, the founder of the world’s largest retail company Alibaba, sits on the fence as he believes that globalization is good but needs to be improved.
So many authors promote globalization and see it as an effective way to achieve a just world but negative aspects of globalization such as poverties, inequalities, injustices, starvations, backwards and marginalization are all serious problems still existing in many parts of the world today (Gazleh, 2001).
Nevertheless, globalization as contributed and improved the lives of people around the world. a huge amount of employment opportunity have being generated due to the rapid growth of globalization in the world today( world bank group and world trade organization 2015).Globalization has also enhanced education by allowing fast cross-country comparisons, exposed human rights violations in remote corners of the world, boosted international cooperation, encouraged international migration and remittances flows, and provided the basis for a global awareness (Gurría,2007).Important programs like the Millennium Development Goals or the $100 dollars Laptop Project have being very successful because of globalization (Kasteli,2007). The benefits of globalization are measurable, numerous and precious.
Globalization has had a tremendous impact in the financial market restructuring the world’s market over the last past decade breaking the barriers between domestic and international trade creating different types of financial transaction and increasing the size with speed. As a result, international financial market has become a connective medium that interlocks political and economic phenomena worldwide (CIA 2011).
The effect of technological change on the global economic structure are creating immense transformations in the way companies and nations organize production, trade goods, invest capital, and develop new products and processes (Stver and Muroyama,1988). Globalization and Social Change analyses the effects of globalization and the new economy on people living and working in different places. Emphasis is placed on socio-economic aspects of change, particularly on the development of information and communication technologies and changes in working patterns and living arrangements (Perrons,2014).
The aim of this paper is to critically examine the impact of globalization on Nigeria over the years and in the future.
Globalization in Africa
African as benefited little from the globalization process because of the specific problems in the area of development (Wenjing et al, 2012).
Source: World Investment Report, UNCTAD, 2002 and 2004.
The world FDI inflows for Africa compared to the world is very low. Africa is more sideline in the global economy and its contribution to world trade investment declined (Collier, 1995).
It is almost impossible for globalization to enable the development of Africa because of the low income and resources of Africa, world piece and demand for Africa crops and a majority of Africans live in rural areas where the economic cycle depends on an unpredictable weather (Mohamed and Kenton, 1999)
Globalization in Nigeria
Despite the emphasis of the success of globalization, countries and states in Africa have still not enjoyed its impact and suffer from poverty and inequalities. For neoliberal, globalization helps the growth and development of developed countries at the expense of developing countries and under developed countries (Bush,2008). A major reason why Africa’s economy is well below standard is because of the intellectual deceit peddled by international financial institutions claiming that globalization brings universal economic growth rather than a continued subordination to the rule of capital (Saad and Johnson, 2005).
Nigeria is a country rich with so many natural resources such crude oil, natural gas, tin, ore, coal, limestone, niobium, lead, zinc and arable land. the oil and gas sector generates about 35% of the country’s gross domestic product and petroleum exports revenue represents over 90% of total exports revenue (Opec, 2017).
Globalization as affected the country in both a positive and negative aspect. Although globalization offers so many opportunities but it also brings new challenges to developing countries like Nigeria.
Developing countries such as Nigeria are forced into a global relationship and this affects the political, economic and social aspect of the country (Ogbonnaya,2013). Olukoso (1995) argues that globalization is a vision of capital imperialism and that the multinationals are bringing the world back to the survive of the fittest where everybody is strictly concerned about making profit and not worried about the poor.
The process of globalization started about a decade and half ago and happened to have come during an era where the political system of the country was unstable. During this period, Nigeria was in an oil boom era but was ruled by authoritative leaders wasting the country’s resources and non-productive projects and wasteful economic policies (Ogbebulu, 2016).This era experienced the worst wastage of public funds by the military in power as they forcefully snatched the country’s funds and put them in foreign account where it is bettering foreign economies at the expense of the home economy (Onyekpe, 2003).
The effect of globalization on the economy
Nigeria is the most populous country in Africa with a lot of human resources and natural resources (united nations department of economic and social affairs 2015). But even with all this comparative advantage, Nigeria has failed to live up to her standard as she as allowed herself to be the dumping ground for all sort of imported goods for different countries (Noko, 2015). Globalization has restricted Nigeria to merely a producer of raw materials to a consumer of manufactured goods (Dembele, 1998). The country’s main source of revenue is crude oil and the fact that Nigeria has to export the raw materials out of the country and imported later to meet the demands for local consumption is an embarrassment to the image of the country (Central intelligence agency 2013). Globalization has many advantages and disadvantages which is not evenly distributed. This imbalance leads to polarization between the developed countries that gain, and the developing countries that lose out (Obadan, 2001). 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 (Konyeaso, 2016).
Although Nigeria recorded a high GDP over the years, but these numbers are just nominal values as they have no real effect on the rate of employment in Nigeria leaving many youths unemployed in the country (Ukpere, 2011). The country is rich but the people are poor. The country’s economy improved in recent years and recorded a gross domestics product of $510 billion (world bank,2014) making Nigeria’s economy the largest economy in Africa and the 26th largest economy in the world and this does not have any positive impact on the rate of poverty in the country (Bolanle, 2015).
Globalization impact on employment is very critical. For example, the textile industry which employs about 25% of the country’s population is about to fold up because of the importation of cheap textile from Asia (Olakitan, 2015) leaving thousands of Nigerians unemployed.
According to Dangote, Africa and Nigeria’s richest man, Nigeria import rice which cost the country about 2billion naira every year. The country spends about 1trillion naira on food annually (Elebeke, 2016) and the question “why a country which so much human resources and good land for agriculture spends such money” can only be answered by the effect of globalization.
Many small businesses will run down as they cannot keep up with the competitions form multinationals and the cheap rate in which they offer.
oxford research group 2012
According to the oxford research group, the rate of poverty in the country has increased steadily. The agriculture sector in which the bulk of the population earns a living dropped by almost 50% because of the oil boom (Thomas and Canagarajah, 2002).
Ogbeide and Agu states that ‘the country has increasing rate of poverty both at the regions and at the national level, high unemployment, high income inequalities, low human capital, high percentage of population on welfare and high out migration in the face of high economic growth measured by GDP’
The effect of globalization on the Health
It is estimated that about 3.1million Nigerians are infected with human immunodeficiency virus (HIV), which means that Nigeria has the second largest number of people living with the virus in sub-Sharna Africa and the highest in west Africa (Obinna, 2011).
The movement of people from one country to another has been made easier because of globalization and this facilitates the rate at which the virus is spreading across national borders. infected people travel in and out of the country and infect other people causing the virus to spread rapidly (Altman 1999).
Also, human trafficking for commercial sex purposes increases the spread of the disease in Nigeria. Trafficking in persons, which the International Labor Organization (ILO, 2001) describes as “the underside of globalization”, is one of the greatest human rights challenges of our time. women are taken to Europe for sex work and are placed in private homes brothels and street corners where they are forced to offer sexual activities for money.
Notwithstanding, health services are increasingly influenced by globalization induced changes in health care policy (Huynen at el 2005)
The free movement for people from on country to another makes it possible for a sick person to travel to a developed country for medical care. Nigerians which are also very talented travel to other countries which are advance in their health sector. The most important organizations responsible for global health are the world bank and world health organization (Dodson et al 2002). They both play important roles as they acknowledge the importance of good health and influenced health related policies together with the international monetary fund (IMF) (Hong, 2002).
The effect of globalization on the Environment
Nigeria is a country very rich in oil. the activities of the oil industries and multinational producing oil in the Niger Delta area is a very serious concern in the country’s environment. These activities such as exploration, production, refining and transportation have caused widespread social and ecological disturbances (Adesanya 2012). These include explosions from seismic surveys, pollution from pipeline leaks, blowouts, flaring, drilling floods, and refinery effluents, as well as land alienation and widespread disruption of natural terrain from construction of oil related industrial infrastructure and installations.
The impact of the exploratory and extractive activities of global forces – Shell whose operation in Nigeria alone accounts for 14 % of its total global operations, Mobil, Agip, Chevron, Texaco, Total, etc. – have basically affected the social organization of the Ogoni people and the Niger Delta in general (Kelbessa, 2007).
Another major environmental problem associated with globalization is the usage of generation in the country. Nigeria is the largest importer of generators in the world, with over N1.3 trillions been spent in the last four years purchasing generators in an effort to respond to the declining power supply in the country (Adesanya, 2012). Generators are meant to back up power supply but many Nigerian homes and company run generator every day and this is a major source of noise pollution and also produce a lot of toxic gas affecting the ozone layer.
The effect of globalization on politics
Multinationals companies such as shell, unilever and chevron and other organization such as world bank and the IMF have transformed the political and economic system of the country (Nura, 2003). The political sector is greatly influenced by international and regional institution such as the European union and united nations. Because of globalization, Nigeria has found it easier to receive financial aid from other countries and financial institutions. In 2014, China signs its biggest oversea contract of 12billon us dollars with Nigeria railway (South china morning post, 2014). This investment will improve the transport system in the country. Globalization also contributes to the worlds peace as it reduces conflict round the world. Countries like the united states of America and China promise to help Nigeria fight Boko haram (Sahara reporters, 2015).
The effect of globalization on culture
Taylor states in his book Primitive culture, published in 1871’that culture is a complex whole which includes knowledge, belief, art, law, morals, custom, and any other capabilities and habits acquired by a person as a member of the society’. globalization as affected the country’s cultural background both in a positive and negative way. Ogohi argues that the positive impact of includes integration of Nigeria culture, speed access to Nigeria culture in the internet, preservation of cultural artifacts and global access to the cultural heritage. Globalization has affected Nigeria in a more negative way than positive as it affected the language, the way the people dress, the respect for the elders and the environment (Oringamie, 2012). Westerners try to undermine the cultural heritage of various people around the world through colonization, imperialism and globalization (Akande, 2002). The language is no longer spoken by the children therefor endangering and possible extinction of the mother tongues in the country (Dubrow,2002). The world Council of churches state that’ no culture is possible without a language.it is an important perquisite and therefore to kill the language is to kill culture’ (world council of churches). Nigeria as well as the whole Africa nation is losing its identity.
From the discussion above it is obvious that globalization as affected the country in both a positive and negative way.
the advantage lies in the capacity for wealth creation through export of goods and services and access to new products with the idea of free trade and bringing down international borders. Technology has made things easier and improved the lives of the people. The ability for different Nigerians to be able to travel round the world for health care and educational purpose is also an advantage. Organizations like world bank and world health organization play a major role in the lives of Nigerian by supporting and building infrastructures to help farmers in the local areas develop their main source of income.
One of the major disadvantages of globalization in Nigeria is that it has made the rich richer and the poor poorer. Many authors seem to agree with the point that globalization as done more harm than good to the country. Despite the steady increase of the GDP, many Nigerians are still living in intense poverty and many youths are unemployed. Since when foreign multinationals discovered oil, the major source of livelihood for the people was ignored by the federal government of the country and this made many Nigerian farmers to suffer.
Globalization as affected the culture of the people in such a bad way that the younger generation cannot speak the native language. The cultural values of the people are changing gradually and the people might lose their identity.
Identify two industries offering opportunities for a foreign multinational to enter, proving strong justification for your choice
Nigeria is a country with so much untapped resources. A major industry suitable for a foreign multinational is the Agricultural sector. In 1960, before oil was found in Nigeria, the country was one of the most promising agricultural producers in the world producing and exporting groundnut and palm oil to developed countries around the world (Green, 2013). But since the discovery of oil, all the attention has been focused on the oil industry leaving agriculture to bleed. The former minister of agriculture Akinwumi Adesina states that ‘Nigeria is known for nothing else than oil, and it is so sad because we never used to have oil- all we used to have was agriculture’.
Over 70% of the nation’s population are small scale farmers producing small scale food not even sufficient to feed the country’s population (nations encyclopedia, 2017).
The graph shows the percentage of unemployment in Nigeria according to the National bureau of statistics which came up to 14.2% in 2017.The rate of unemployment in the country is high as the youth are not ready to enter agriculture. Multinationals can make it more attractive and show the youth that agriculture is actual a way to develop the social and economic situation of the country.
The population of the country gives the multinational a competitive advantage making human resource not a problem for the agriculture sector.
Nigeria also has good government policies which support the growth and development of agriculture such as building of infrastructures and proving water for irrigation (Fadama). Multinationals can take advantage of these policies to increase their production.
Mode of entry
A suitable mode of entry into the agricultural sector is joint venture. A larger percentage of farmers in Nigeria are in the rural region which still believe firmly in traditions and culture (RR).it will be hard for a foreign multinational to enter the rural region where most agricultural lands are to start production. By having a partnership agreement with an already existing agricultural company will allow them to learn more about the people and their culture. The existing company will also have a practical experience on how things are done in the area proving adequate insight.
Another industry suitable for multinational to invest in the country is the power sector. Nigeria has a limited supply of power which as a missive effect on the economy. National electricity power authority (Nepa) was a nonprofit government agency responsible for providing electricity for the Nigerian people until it was privatized to power holding company of Nigeria (phcn) whose main aim is to maxims profit. The situation went from bad to worse as the company demands for higher tariffs not caring about the poor and still no improvement in the power sector (Oyebanjo,2013). According to the world bank in 2015 edition of its Doing Business report, Nigeria is the 187 of 189 countries in getting electricity. A country without adequate supply of energy is at the risk of losing potential investors (Onochie, 2015).
source: national bureau of statistics 2016
According to the national bureau of statistics, the manufacturing industry in Nigeria has reduces over the past years. About 272 firms shut down last year while some reduced the production rate and employees and the major reason is the lack of unlimited supply of power in the country (Premium times, 2017).
Mode of entry
A multinational can enter the market and form a partnership with PHCN. Since the facilities and well-constructed dams are already in place, specialists can be sent by these multinationals to improve the electricity supply in the country. The sector is a monopolistic sector which means that if the job is done well a lot of profit can be made for the foreign company and the electricity in the country will improve. They will not be any need to build any infrastructure or dams reducing cost and risk.
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