An Appraisal of the Effects of Globalization on the Nigerian Economy

Abstract

The world has now been reduced to a global village; so much that what happens in one country now have almost instant ripples effect in other countries world over. This study is on the appraisal of the effect of globalization on the Nigerian economy. The study made use of secondary data sourced from the Central Bank of Nigeria statistical bulletin and the National Bureau of Statistics between 1986 and 2011. The model for the study has as its dependent variable the Gross Domestic Product (GDP) and its explanatory variables were Foreign Direct Investment (FDI) into Nigeria, Export and Import data. Using the Ordinary Least Square (OLS) multiple regression techniques; our study revealed that the there is a strong positive relationship between the Nigerian Gross Domestic Product (GDP) and foreign Direct Investment (FDI). That is, the FDI has impacted on the Nigerian economy positively. However, the study further revealed that import has been growing over time though not at the pace of the GDP, whereas exports suggested that it has been significant over the period of study. The study, therefore recommended that efforts should be geared towards creating an enabling environment for FDI to thrive in the economy and that imported products that are produced locally should be discouraged from being imported to give room for local industry to thrive as well.