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Nigeria: Economic Report
Globalization is a dominant force in the contemporary world. Today, the process is being driven by the rapid growth of information technology. It should be mentioned, however, that globalization is not paralleled with the history of humankind. In this perspective, most states have joined efforts, striving to intensify their efforts in transacting business activities worldwide. This state of affairs has facilitated in the construction and distribution of business networks around the globe. The world today, therefore, has become a global village since most countries have joined their political, economic, technological, and social forces. This move has led to the growth of the contemporary international system (Akinboye n.p.). The goal of this paper is to evaluate the modern state of Nigeria’s economy, study how it has grown since the times of the first global economy, and its participation in the second global economy.
Nigeria has been well known in terms of minimizing the adverse effects of globalization that enabled it to harness various benefits to boost its national development. The country has been on the process of reforming its political economy, hence, allowing it to cope with numerous challenges that face the contemporary global economy. Participation in the global economy is regarded as a multifaceted process, which focuses on uniting the political, economic, cultural dimensions, and the social aspects of a state. The notion of globalization, therefore, is rather broad and has diverse definitions (Akinboye n.p.). In this perspective, Nigeria has been known as an active player in facilitating the development of the global economy.
Globalization has provided various developing countries, such as Nigeria, with an opportunity to advance their wealth significantly by allowing them to increase their assets. This strategy has led to an expansion of international trade, which in turn has allowed the country to gain access to a range of brand-new ideas and technologies to increase their wellbeing. In this perspective, it is true that globalization has been affecting all aspects of Nigeria’s economy. It offers Nigeria and other developing countries around the world many opportunities to expand their trade, as well as improve their cultural, political, and economic dimensions (Encyclopedia of Nations n.p.).
Globalization has significantly reduced the barriers that are normally present in the international trade. The removal of those barriers has opened doors for export and growth of nations’ wealth. For example, studies reveal that Nigeria’s economy has been characterized by monoculture; therefore, it depends on other western countries, in order to survive. In the 1960’s, for example, Nigeria was heavily reliant on agriculture to earn revenue (Encyclopedia of Nations n.p.). This strategy allowed the country to provide its citizens with required goods and services. In this case, Nigeria was able to export cash crops, such as cocoa, coffee, and groundnuts to other countries.
The discovery of oil in Nigeria in 1970, however, changed the way in which Nigeria conducted its business activities. Agriculture is no longer the key driver of the Nigerian economy. In the 1970’s, Nigeria experienced a boom in oil production, thereby, allowing it to shift from agriculture to petroleum production. Today, much of evenue in Nigeria is derived from oil trading. The fluctuation of oil prices in the world market has caused a lot of instability in the country. In this perspective, the concept of globalization requires nations to participate in trade liberalization (Falola, and House-Soremekun 5). As a result, the world market requires states to allow free and unrestrictive movement of goods, finance, and various forms of investment. In this perspective, it is evident that the opportunities for growth are heavily dependent on a production market. Among the nations in Africa that are experiencing exponential growth are countries that have managed to raise their export capacity. In this perspective, therefore, it is important for Nigeria to borrow ideas and experience from these countries so that it can manage to realize significant growth given the fact that it is an oil producing country. However, the participation of Nigeria in the world market today has allowed the nation to develop significantly (Falola and House-Soremekun 7).
When nations participate in the world market, they are able to enrich their economic, cultural, and political dimensions. Under such global conditions, they are able to gain access to a range of goods and services and export their goods and services on a large scale. In this perspective, a nation is provided with various ways and methods of fighting with poverty. For example, the economic prosperity that is being observed in countries such as Korea is attributed mostly to the issue of global participation.
In the modern world, the growth of the Internet has facilitated the participation of countries in the global economy. In this perspective, it has facilitated the development of new production technologies, as well as discovery of new managerial practices. Moreover, the father growth of technologies and cultural practices in Nigeria would not be possible without country’s participation in the world economy.
On the other hand, when a country participates in the world economy, it faces fears of uncertainty and volatility with regard to the formation of capital; thus, globalization also acts as a negative consequence in terms of capital formation. In this perspective, Nigeria is treated as a developing economy. As a result, it has not been able to develop proper mechanisms that can enable it to cope with the new trends of the modern economic climate. For example, the measures that the Nigerian economy has set in place have only made the economy perform worse. In Nigeria, medium income is low, and it has led many people to live below the poverty level (US Department of State n.p.).
Thanks to participation in the global market, Nigeria has realized various social initiatives. In this case, however, most people in Nigeria are still faced with the threat of job insecurity and most of them are forced to derive their income from salary. Moreover, the unskilled and uneducated people are not able to perform like those who possess a high level of education, as well as sophisticated skills.
Nigeria has been an active participant of the world economy. Initially, however, it was an agricultural country exporting various forms of cash crops, such as cocoa, coffee, palm products, and groundnuts. However, it was not an active participant during the First World War since its economy was not well-established to allow it have a significant effect on the war. However, Nigeria is an active participant in the second global economy. With the discovery of oil in 1970, the country has experienced tremendous growth. This discovery has provided the country with an opportunity to export oil and yield high returns, which have allowed the country to increase its GDP (Falola and House-Soremekun 18). After the discovery of oil, the country was able to establish contacts with other developed nations and improve the infrastructure of the country significantly.
Today, Nigeria is a federal republic, and it has a strong presidential administration. It has adopted the multi-party system as the effective way of governing the country. It has also adopted the economic liberalization process that allowed the state to be able to improve its infrastructure significantly. In this case, it is true that the economic history of Nigeria has played a vital role in terms of allowing the country to integrate into the world economy.
The distribution of wealth in the countries that participate in the global economy is regarded as unfair. Even though, the poor nations have remained poor even after entering the global economy, some countries have managed to benefit significantly. In Africa, the income of many nations such as Nigeria has been noted to decrease whereby some households usually live for less than 2 dollars per day. In this perspective, therefore, some nations have become frustrated because of participating in the global economy (Falola and House-Soremekun n.p.).
Globalization makes most countries interdependent; however, this form of interdependence affects some nations significantly. For example, the oil glut that took place from 1982-1998 was propagated in a rapid manner. This situation led to a decline in import volumes of real commodity prices, such as oil products. In this perspective, since Nigeria relies on oil as its main export commodity, the country’s revenue is hit hard whenever this kind of situation happens.
In the modern economic world, most financial markets are integrated. As a result, the portfolio shift affects the interest and exchange rates. As a result, today, incidences of financial intermediation and currency transactions are numerous. When any economic instabilities and shocks are experienced in this case, the Nigerian economy is greatly destabilized. Fears of uncertainty and volatility on capital have been mostly associated with participation in the global economy. This is regarded as one of the negative influences of participation in the global economy. Most problems associated with instability of the economy are said to be generated from outside. In this perspective, since Nigeria is a developing country, it has not been able to establish mechanisms that can allow it to mitigate the shocks generated in a result of globalization (US Department of State n.p.). This paper proved that globalization has caused many problems for Nigeria’s economy since it is still on the process of development and integration.
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