Nigeria and Globalization

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Shahad Aloseemy,688262 PMA1020 Nigeria, and Globalization

Nigeriaand Globalization

BY:Shahad Y A Aloseemy

Student 688262

ModuleCode: PMA1020


Nigeriais the biggest economy in Africa. It also hosts the largestpopulation of the continent. The system of governance is federalismwhere the country is divided into several governmental units. NigeriaGDP was estimated at around 500 billion dollars in 2015(Obstfeld, 2015). In addition, the per capitaincome is estimated at 3154 dollars the same year. The GDP per capitamakes Nigeria one of the richest economies in Africa referred to asthe lower middle class. The country is currently experiencing arecession due to the low global oil prices. Thecountry received 7.2 billion dollars as the foreign direct investmentin 2015 (Obadan, 2014).

Theinvestments were in infrastructure and real estate. In addition, thecountry received a significant amount of remittances from itsdiaspora population. Agriculture is poorly funded though it employsnearly two-thirds of the population. The majority of the youthleaving institutions of higher learning remains unemployed. Thecurrent recession means they will wait longer to get a job. Thecountry macroeconomic structure is unstable due to the large debt ofGDP ratio estimated at 56% (Obstfeld, 2015).Oil and gas exports constitute 80% of the country exports. Othersectors the country is trying to diversify to include tourism. All inall, the government understands it can no longer rely on the naturalresources to run the economy.


Executive Summary 2

Introduction 4

Results 5

Nigeria Country Background 6

1.0 Geography 6

1.01 Economic State 6

1.02 History 9

1.03 Current Political System 9

1.04 Social and Cultural Impacts 10

1.05 Political Globalization 11

2.0 Discussion 11

3.0 Conclusion 12

4.0 Recommendations 12

5.0 References 12


Nigeriaeconomy remains one of the most attractive economies in Africa and alarge magnet for private equities and conglomerates wishing to expandtheir market share in Africa. The first reason that makes Nigeriaattractive to the investors is the huge population (180 million).Therefore, there is an almost certain available market for goods andservices. Important to note, the richest man in the continent comesfrom this country demonstrating the country`s success in the area ofcommerce (Obstfeld, 2015). The report willdiscuss the impact of globalization on the Nigerian economy.

Nigeriahas a large number of its citizens working and living abroad. ManyNigeria lives and works in Europe and North America more than anyother country in Africa (Obadan, 2014).The main reason why Nigerians are leaving the country is the lack ofopportunities. Recently, Nigerians were among the wave of peopleillegally transiting from Africa through Libya to Europe to seekgreener pastures.

Unfortunately,the country ranks badly in the war against graft. In fact, many ofthe endemic problems facing the economy may be attributed to thecorruption perpetuated by the past regimes. Recently, in a globalforum held in London to fight illegal money. The former England PrimeMinister (David Cameroon) referred to Nigeria as being fantasticallycorrupt (Ahmed &amp van Hulten, 2014).However, what Cameroon failed to mention was that majority of thestolen wealth is hidden in tax havens within the Britain territories.

Pastministers and influential people invested most of their ill-gottenwealth in London properties. Some of the properties are valued atmillions of dollars. Notably, more than half the population of thecountry live on less than a dollar a day (Ahmed &amp vanHulten, 2014). It would be appropriate to say thatforeign governments have failed to help the administration incombating graft and recovering public funds. In addition, it showsthe inefficiencies that have been brought about by globalization.

Citizensprotesting corruption in the government

Theprimary goal of globalization is to promote commerce. However,globalization has not brought bread and butter to everyone. The entryof multinationals in the local economies has threatened existingdomestic firms. Governments across the globe have tried to instituteprotective measures to safeguard interests of local enterprises.However, such approaches have to adhere to the international practiceof fair trade (Obstfeld, 2015).

ResultsNigeriaCountry Background1.0Geography

The&nbspFederalRepublic of Nigeria is located in the Gulf of Guinea bordering Beninin the west, Chad, and Cameroon in the east. The country consists of36 states Abuja is the capital city. Nigeria is well known for itsabundant amount of raw materials worth billions of dollars. Examplesof such materials include Garnet, Gold, Vegetables, fruits, trees,animals and tobacco.


1.01Economic State

Nigeriathrives through exports of raw materials mainly crude oil.Unfortunately, raw materials do not support the growth ofmanufacturing sector which is vital for the provision of decent jobsto the citizens. Inaddition, the raw materials are affected by the global commodityprices. Therefore, the economy of Nigeria enjoys impressive growthwhen the global commodity prices rise and experience the oppositewhen the prices tumble. For example, in 2014 when the oil prices wereabout $112 per barrel the country enjoyed unmatched growth. However,when the oil prices started falling in 2015, the economy startedcrashing.

Currently,the Nigeria economy is in recession mainly because of the low globaloil prices. The situation is similar to other economies that heavilydepend on energy exports, for example, Russia which has also beenexperiencing a depressed growth. The problems facing the Nigerianeconomy are endemic and stem from years of neglect for other sectorsof the economy and primary focus on oil. Nigeria has vast tracts ofarable land. However, it imports almost all its grains from Russiaand Asian countries. Agriculture remains the greatest employer.However, years of neglect and underfunding has turned the sector to ashadow of its former glory.

Thedeath of agricultural sector is clear evidence of how globalizationhas negatively impacted the economy of Nigeria. Globalization hasled to reliance on cheap imports of grains from Russia at the expenseof investing in the local agricultural sector. Globalization has alsoresulted in job losses as farmers are unable to price their localproduce at a competitive price compared to the imports. For example,the cost of the farm inputs in Nigeria remains incredibly higher thananywhere else in the continent. The agricultural products becomeuncompetitive in the regional market. Therefore, even those whomanage to produce something there is no market for their products.

Anothersector of the Nigerian economy that has suffered from globalizationis the manufacturing industries. The domestic market is flooded withcheap imports from China and other Asian countries making locallymade product uncompetitive. In the developed economies of Europe andNorth America, quality jobs are provided by the manufacturing sector.Therefore, when the manufacturing sector is doing badly, jobs arealso scarce to find. Many of the unemployed youths take the dangerousroute of immigration to Europe to find better livelihoods. However,the growing number of migrants from the Middle East has pushed theEuropean countries to the limit. The majority of the migrants fromNorth and West Africa are being voluntarily deported back to theircountries of origin.

Globalgiants mainly Shell dominates the Nigeria oil industry. However, thecitizens are yet to enjoy the benefits of the natural resource.Instead, the black gold has become a source of conflict within thedelta region. Before the discovery of oil, Nigeria had a boomingagricultural sector and was self-reliant. The discovery of oil led tothe neglect of agricultural sector and the focus shifted to theexploration and exploitation of the crude oil (Obadan, 2014).Most of the benefits from the oil should go to the residents.However, the revenue sharing formula between the government and theoil company is favourably for Shell (the oil company operating inNiger Delta region).

Anotherclear example of exploitation and lack of accountability by themultinational is about oil pollution in the Niger Delta. For years,the delta ecosystem has been the source of livelihood for theneighboring communities. However, improper handling of oil has led toextensive spread spillage contaminating the drinking water andkilling fish. The company all along evaded responsibility by claimingthe illegal activities around the area including oil siphoning werethe primary cause of the spillage (Benyon &amp Dunkerley,2014). However, it was established during a courtprocess that for years the company was well aware of the dangersposed by the lack of continuous maintenance of the pipeline. Indeedinsiders working within the company disclosed to the media that forseveral decades the company knew about the risk of rusting andpossible spillage but did nothing about it.

NigerDelta AP

Pollutionin Niger Delta

Thevictims of the spillage helped by human rights activist successfullylaunched a suit against Shell in an international commercial court.The bench determined that the company was to blame for the spillagefor the failure to undertake regular maintenance checks.Consequently, the residents were awarded 55 million euros incompensation. Each affected individual was to get 2200 euros (Obadan,2014). The figures are too small compared to manyprofits the company makes each year from its oil sales. Notably, theeffects of the spillage are far reaching and are unlikely to bereversed by the compensation. The company used weakness in the systemto escape responsibility and compensate the victims. Notably, despitethe vast oil resources, residents of the Niger Delta remain poor. Thecompany has done little regarding corporate social responsibility touplift the lives of poor majority living in the region.

Peopleliving in Niger Delta where Shell exploits oil, little efforts havebeen taken in helping local communities.


Nigeria’scurrent issues stem from its colonial era. The country was dividedinto North and South in 1914 (Pieterse, 2015).&nbspNigeria was one of the key routes used by slave merchants. In fact,the majority of black people working in American plantations werefrom West Africa.

The strategy was to allow easy exploitation of the natural resourcesby the European companies. The colonization by Britain affectedNigeria in several ways. Notably, it led to simmering tensionsbetween the Northern Muslims and Southern Christians (Omenugha,Uzuegbunam &amp Ndolo, 2016).The Muslims in the North look up to the Middle East in pursuit oftheir socio-economic welfare. On the other hand, the South is mostlypopulated with Christians and is more ethnically diverse, and itssocio-political structure is influenced by traditional African andWestern cultures.

Duringthe cold war, Nigeria aligned itself to the west. The country islooked favorably by the government of the west and receivessubstantial financial aid (Benyon &amp Dunkerley, 2014).&nbspHowever, there is a growing demand for accountability andtransparency from the international financiers and donors.

1.03Current Political System

Duringthe early days of independence as it was the case anywhere else inAfrica, Nigeria went through political turmoil marked by militarycoups. However, the challenges of the past years have helped Nigeriato develop and adopt a new constitution (1999). In addition, thewestern political system has influenced Nigeria to set up democraticinstitutions. Recently, the former president Goodluck Jonathanpeacefully transferred power to Buhari after losing in the 2015national election (Rasul &amp Rogger, 2015).The peaceful transfer of power shows Nigeria has matured as ademocratic country.

1.04Social and Cultural Impacts

Globalizationhas had both positive and negative effects on the social lives of theNigerians. For example, globalization introduced Nigeria to mobiletelephony and the internet. Nigeria has extensive coverage of mobilenetwork across the country with the majority (78%) of the citizensowning mobile devices (Omenugha, Uzuegbunam &amp Ndolo,2016). In addition, Nigeria is also tech savvy andare ranked first in the continent on the use of internet services. InAfrica, they lead in the use of social media networks especiallyFacebook (Benyon &amp Dunkerley, 2014).&nbspHowever, globalization and especially the internet has resulted inthe decadence of the moral values of the society. In the culture ofAfricans, homosexuality was forbidden. However, there is growingsupport for same-sex marriage in Nigeria and anywhere else in Africa.Adverse impacts of globalization have been brought by blind copyingof the Western cultures.

Notably,Globalization has also led to a large number of foreigners working inthe country as expatriates. Some expatriates work for Shell OilCompany as engineers and supervisors. Other foreigners own and managetheir own business. The presences of the foreigners have helpedNigerians to learn and appreciate cultures from different parts ofthe world. Some of the American companies operating in Nigeriainclude Uber, a taxi service (Omenugha, Uzuegbunam &ampNdolo, 2016). The main imports from Americainclude machinery and technologies, for example, tractors, computers,and phones.

ThoughNigeria has freedom of the press, fewer international media housesare operating in the country. The country`s freedom of media isgreatly influenced by current social, political status (Rasul&amp Rogger, 2015). Therefore, sometimes there ispolitical goodwill to support freedom of the media while in otherinstances the state actively suppresses the press. However, theaccess to the internet allows people to get international news oftheir choice conveniently.

Thewestern culture is also having an influence on Nigerian cultureregarding music and dances. Traditional music is being replaced bywestern inspired lyrics and dance moves. One cannot make muchdistinction between the style of music from Nigeria and America(Omenugha, Uzuegbunam &amp Ndolo, 2016).

The westernization of the Nigerian culture hasattracted a lot of resistance from Muslim fundamentalist in theNorth. For example, Boko Haram, now in the UN list of terroristorganization arose with the sole purpose of resisting westerncultures in Nigeria. Notably, Boko Haram is opposed to the educationof the west. The group controls much of Nigeria Kano district andspreads its influence in neighboring countries such as Chad(Ahmed &amp van Hulten, 2014).

In2015, the group stormed into a government school and kidnapped morethan 200 girls. The girls have never been rescued although somemanaged to escape (Rasul &amp Rogger, 2015).The government soldiers have fought the group and significantlyreduced its capabilities to launch large-scale attacks. However, thegroup has not been defeated and continue to carry out suicidebombings within the country. Lack of peace in the region has also ledto the loss of livelihoods to the residents.

Inmy view, the changes occurring at the social level have been to thebenefit of the society. The Western culture has led to promotion andadoption of democratic governance. In addition, freedom of the presshas considerably improved through the approval of the culture of theWest (Pieterse, 2015).&nbsp The governmentis becoming more open, and there are genuine efforts to promoteintegrity and accountability in the government.

However,some western cultures remain foreign to the majority of the citizens.For example, gay marriage has attracted a lot of resistance. Inaddition, people are against the idea of legal abortion (Asaju,Arome, &amp Anyio, 2014). Corporate greed thatdefines Western culture has also led to resistance. In the UnitedStates, there is a feeling that large corporations own and controlthe government. Similar sentiments are felt in Nigeria with thegovernment unable to hold accountable multinationals such as Shell.

1.05Political Globalization

Theidea behind political globalization is for Western government and theUnited Nations to have influence in political affairs of a countryusing non-governmental organization. For example, the amnestyinternational receives substantial funding from western governments.The agency monitors human rights violations and reports to theseinternational bodies (Asaju, Arome, &amp Anyio, 2014).One could say, political globalization is the efforts by the Westerngovernments to expand their power and influence across the globeusing proxies. Notably, in the United States, any organizationoutside the country wishing to operate within the country mustregister as a foreign agent. However, the government in Africa thatresist interference by the internationally funded groups arethreatened with sanctions. The instance demonstrates the doublestandards adopted by the western governments.

InNigeria, political globalization has a positive impact on thewellbeing of the society. For example, the Nigeria Human rights watchgroup has reduced the instances of persecution and forceddisappearances by the government. The group has also promotedintegrity and transparency in the governance system reducing cases ofcorruption.


Theresult shows the Nigeria economy is dependent on commodity exportswhich are susceptible to global price instability. The countrymacroeconomic is stable but is threatened by the growing public debt.Lack of investment in the agricultural sector will expose thegovernment to dangers of starvation in future. The government lackleverage over multinationals operating in the country oilfields. Thecurrent debt levels are sustainable, but there is a need to increasethe foreign country reserve (Pieterse, 2015).&nbsp


Inconclusion, globalization has allowed Nigeria to trade with othernations. In addition, it has attracted direct foreign invest (FDI) inthe country helping expand the economy and create job opportunities.However, corruption in the government has hindered the efforts togrow the economy and offer better services to the citizens.Therefore, globalization is the best approach to expand thedemocratic space for the African countries. However, western culturesshould not be copied blindly. Nigeria should only adopt attributesthat promote more cohesive society by building unity and reducingdivisions.


Developa clear revenue sharing formula stipulating what the residents shouldget a fair share from the exploitation of the natural resources. Themassive budget deficit could be plugged by the government removingoil subsidies. The government should look at developing and adoptingnew technologies as the growth prospect for the future.


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Asaju, K., Arome,S., &amp Anyio, S. F. (2014). The rising rate of unemployment inNigeria: the socio-economic and political implications.&nbspGlobalBusiness and Economics Research Journal,&nbsp3(2), 12-32.Retrieved: file://tawe_dfs/Students/2/688262/Downloads/2015_GCB_SubSaharanAfrica_EN.pdf

Benyon, J., &amp Dunkerley, D. (2014).&nbspGlobalization: thereader. Routledge.Retrieved:

Obadan, M. (2014). Foreign Investment Flows to the NigerianEconomy.&nbspCovenant Journal of Business and SocialSciences,&nbsp5(1).Retrieved:AWSAccessKeyId=AKIAIWOWYYGZ2Y53UL3A&ampExpires=1490015044&ampSignature=PAALCxgD85t805vCINlSV5uiZKo%3D&ampresponse-

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Rasul, I., &ampRogger, D. (2015). The impact of ethnic diversity inbureaucracies: Evidence from the Nigerian civil service.&nbspAmericanEconomic Review,&nbsp105(5), 457-61.