IMPACT OF GLOBALIZATION ON THE GROWTH OF NIGERI ECONOMY

CHAPTER ONE INTRODUCTION 1.1 Background to the Study Globalization as the intensification of economic, political, social, and cultural relations across international boundaries, has become a defining phenomenon of the 21st century. Its influence on national economies, especially those of developing countries, has generated significant academic and policy interest. In the case of Nigeria, Africa’s largest economy by population and among its most resource-endowed, globalization presents both opportunities for accelerated growth and challenges linked to economic dependency and structural imbalances. The global economy has witnessed increasing levels of integration, driven by trade liberalization, capital mobility, advancements in information and communication technology (ICT), and the proliferation of international institutions promoting cross-border economic cooperation (Stiglitz, 2018). For Nigeria, globalization has opened channels for foreign direct investment (FDI), expanded market access for oil exports, encouraged the inflow of technology, and facilitated cross-border collaborations. However, it has also exposed the country to the volatility of global markets, weakened local industries, and entrenched a mono-cultural export economy reliant on crude oil (Okonkwo & Ekpo, 2021). Despite the government’s repeated efforts to diversify the economy through reforms and strategic economic partnerships, Nigeria's growth trajectory remains uneven. Periods of global economic boom, such as during the early 2000s commodity supercycle, were accompanied by GDP growth, while external shocks—like the 2008 global financial crisis and the COVID-19 pandemic—exposed vulnerabilities in Nigeria’s economic structure (World Bank, 2022). Moreover, the openness of Nigeria’s economy has not always translated into sustainable development due to poor infrastructure, weak institutions, corruption, and inadequate regulatory mechanisms (Onyeukwu & Udeh, 2020). It is within this mixed context of promise and peril that this study is situated. A critical examination of globalization’s impact on Nigeria’s economic growth is necessary to understand the mechanisms through which international economic integration affects key indicators such as GDP, employment, industrial output, and technological progress. By focusing on empirical trends and policy experiences, this study contributes to ongoing debates on how Nigeria can harness globalization for inclusive and sustainable development. 1.2 Statement of the Problem Over the past three decades, Nigeria has increasingly integrated into the global economy, liberalizing trade, welcoming foreign investments, and participating in global financial and institutional frameworks. However, the outcomes of this integration remain ambivalent. While some sectors have experienced growth spurts linked to globalization—such as telecommunications and finance—others, particularly manufacturing and agriculture, have suffered from competitive pressures and underinvestment (Adegbite & Ayadi, 2019). The paradox lies in the fact that despite Nigeria’s openness to the global economy, its economic growth has often lacked inclusivity and resilience. The overreliance on oil exports has made the economy vulnerable to external shocks, while trade liberalization has contributed to the decline of local industries unable to compete with cheaper imported goods. Additionally, globalization has accelerated capital flight and facilitated economic dualism, where a modern, globally connected elite economy coexists with widespread poverty and underemployment (Olayemi, 2021). What remains unclear in the literature is the exact nature and magnitude of globalization’s influence on Nigeria’s overall economic performance. There is a dearth of empirical studies that integrate both macroeconomic indicators and structural dimensions in assessing globalization’s impact. This gap necessitates a thorough inquiry into whether globalization has served as a catalyst or a constraint for Nigeria’s economic development. Accordingly, this study seeks to analyze the impact of globalization on Nigeria’s economic growth, drawing insights from historical trends, policy frameworks, and economic data. 1.3 Objectives of the Study The general objective of this study is to examine the impact of globalization on the growth of the Nigerian economy. The specific objectives are to: 1. Analyze the trend of globalization indicators in Nigeria over the past three decades. 2. Examine the relationship between globalization (measured by trade openness, FDI, and ICT penetration) and Nigeria’s GDP growth. 3. Assess the impact of globalization on key sectors of the Nigerian economy, particularly manufacturing, agriculture, and services. 4. Identify the challenges and policy gaps that hinder Nigeria from maximizing the benefits of globalization. 1.4 Research Questions 1. What has been the trend of globalization in Nigeria over the past three decades? 2. What relationship exists between globalization and Nigeria’s economic growth? 3. How has globalization impacted key sectors such as manufacturing, agriculture, and services? 4. What are the main challenges facing Nigeria in leveraging globalization for economic growth? 1.5 Research Hypotheses H₀₁: There is no significant relationship between globalization and economic growth in Nigeria. H₀₂: Globalization does not significantly affect sectoral performance in the Nigerian economy. 1.6 Significance of the Study This study is significant for several reasons. First, it provides empirical evidence on the dynamics between globalization and economic performance in Nigeria, thus enriching the body of knowledge in development economics. Second, policymakers will find the findings useful for designing economic policies that maximize globalization’s benefits while mitigating its risks. Third, the study offers sector-specific insights that can inform industrial policy, trade strategy, and investment planning. Finally, the study serves as a reference point for future academic inquiries on globalization and its effects on developing economies. 1.7 Scope of the Study This study is limited to Nigeria’s economic performance between 1990 and 2023. It focuses on selected globalization indicators—trade openness, foreign direct investment, and ICT penetration—and their relationship with GDP growth. Sectoral analyses will center on manufacturing, agriculture, and services. Geographically, the study covers the national economy and relies on secondary data from credible sources such as the National Bureau of Statistics (NBS), World Bank, UNCTAD, and the Central Bank of Nigeria (CBN).