Globalization and Economic Development in Africa: The Case of Nigeria

Abstract

The paper examined the impacts of globalization on economic development in Africa with a specific reference to Nigeria for the period 1975 - 2021. Globalization gained momentum across the globe in the 1970s, and in Nigeria, its manifestations became more glaring during the 1980s, particularly with the adoption of the Structural Adjustment Programme (SAP) IN 1986. This justifies the start period of this study. The data for globalization were retrieved from the Swiss Economic Institute, and the data shows various categories of globalization, which are economic, cultural, informational, interpersonal, political, social and trade globalization. Four categories of globalization were selected and utilized for this study, which include: Economic, Social, Political and Trade globalization. The data for economic development was sourced from World Development Indicators as well as other control variables. The data were subjected to a unit root test, and the results show that all the variables are stationary at the first difference. An Autoregressive Distributed Lags (ARDL) was used to empirically examine the long-run relationship between dependent and independent variables. The ARDL bounds test results show the existence of long run relationship between the variables. The bounds test results specifically show that economic, social, trade and political globalization have a long-run relationship with economic development in Nigeria. However, the results for all four measures of globalization are not significant in explaining economic development for the period under study in the case of Nigeria, except for expenditure on capital, which is significant in the short run. The findings, therefore, reveal that despite the penetration of globalization across the globe since the 1970s, its impact in promoting socioeconomic development has not been significant. The findings suggest that the government should look inward by harnessing domestic potentials such as agriculture and solid minerals in its quest to develop the country.