The Effect of Globalization on Selected Sectors of the Nigerian Economy: Agriculture, Manufacturing and International Trade

Abstract

One of the most contentious debate surrounding globalization relates to its net impact on the economic performance of national economies. This concern is much stronger for developing countries characterized by various degrees of distortions and weak institutions. There is a cloudy picture on whether or not globalization has brought more benefits than risks to African countries. This paper examines the evidence for the Nigerian economy. Rather than just looking at its impact on the country’s growth, we followed a sector specific analysis with focus on agriculture, manufacturing and international trade. Using the error correction framework and utilizing annual time series data for the period 1970-2011, the results indicate that globalization has some positive impact on the selected sectors, although the magnitude and significance of these impacts varied from one sector to another. Overall, the evidence shows that globalization offers Nigeria greater opportunities to improve on its economic performance in the selected sectors. Policy options and critical issues that must however be considered for the country to fully maximize its benefits from the forces of globalization are highlighted in the paper.