LOCAL PRODUCTION AND ITS IMPACT ON NIGERIA ECONOMY
Abstract
The
purpose of this study is to examine local production and its impact on
Nigeria economy. This study adopted the survey descriptive research
design for simple percentage analysis. The secondary data for this study
were extracted from CBN statistical bulletin in CBN website and from
the website of Food and Agriculture Organization of the United Nations
(FAO). This study presumed that the economic development in Nigeria
(represented by real GDP) is dependent on Total Local Production TLP
(independent variable), Cashew production in Nigeria CPN (independent
variable) and money supply MSP (independent variable). Simple percentage
analysis was applied for the data analyses following the specified
model. The result obtained shows that total local production and money
supply exert a positive but insignificant influence on the development
of Nigeria economy. Also, cashew production in Nigeria has not
contributed so much to the Nigeria economy.
TABLE OF CONTENT
CHAPETR ONE
1.0 INTRODUCTION
1.1 Background of the study
1.2 Statement of problem
1.3 Objective of the study
1.4 Research Hypotheses
1.5 Significance of the study
1.6 Scope and limitation of the study
1.7 Definition of terms
1.8 Organization of the study
CHAPETR TWO
2.0 LITERATURE REVIEW
2.1 Introduction
2.2 MANUFACTURING SECTOR PERFORMANCE
2.3 PRODUCTIVITY IN THE NIGERIAN MANUFACTURING INDUSTRY
2.4 GLOBALIZATION AND THE MANUFACTURING SECTOR
2.5 SCANNING THE ENVIRONMENT FOR BANK LENDING
CHAPETR THREE
3.0 Research methodology
3.1 sources of data collection
3.3 Population of the study
3.4 Sampling and sampling distribution
3.5 Validation of research instrument
3.6 Method of data analysis
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS AND INTERPRETATION
4.1 Introductions
4.2 Data analysis
CHAPTER FIVE
5.1 Introduction
5.2 Summary
5.3 Conclusion
5.4 Recommendation
AppendixCHAPTER ONE
INTRODUCTION
1.1 Background of the study
The
structure of the Nigerian economy is typical of an underdeveloped
country. Over half of the gross domestic product (GDP) is accounted for
by the primary sector with agriculture continuing to play an important
role. The oil and gas sector, in particular, continues to be a major
driver of the economy, accounting for over 95 per cent of export
earnings and about 85 per cent of government revenue between 2011 and
2012. The sector contributed 14.8 and 13.8 per cent to GDP in 2011 and
2012, respectively. It also recorded an increase in reserves from 37.119
billion barrels (bbs) in 2012 from 36.042 bbs in 2011. In contrast, the
industrial sector in Nigeria (comprising manufacturing, mining, and
utilities) accounts for a tiny proportion of economic activity (6 per
cent) while the manufacturing sector contributed only 4 per cent to GDP
in 2011. This is despite policy efforts, over the last 50 years, and, in
particular, more recently, that have attempted to facilitate the
industrialization process. In this paper we explore the evolution of the
industrial sector in Nigeria over the last 50 years. To set the context
we begin by providing an overview of the policy framework for
industrial development from the 1960s to the present day. At
independence in 1960 and for much of that decade, agriculture was the
mainstay of the Nigerian economy providing food and employment for the
populace, raw materials for the nascent industrial sector, and
generating the bulk of government revenue and foreign exchange earnings.
Following the discovery of oil and its exploration and exportation in
commercial quantities, the fortunes of agriculture gradually diminished
while crude petroleum replaced it as the dominant source of revenue and
export earnings. This is despite a drive for industrial development1 in
Nigeria dating back to the early 1960s with the first National
Development Plan for the period 1962-68.2 Under the First Plan the
country embraced import-substituting industrialization (ISI)3 with the
objective of mobilizing national economic resources and deploying them
on a cost/benefit basis among contending projects as a systematic
attempt at industrial development. The period of this plan witnessed the
commissioning of energy projects such as the Kanji dam and the Ughelli
thermal plants, which provided a vital infrastructural backbone for the
nascent industrial sector. Other important industrial infrastructure
developed during this period, which was considered crucial for
catalyzing industrial take-off in Nigeria; included an oil refinery, a
development bank, and a mint and security company. Even though, the main
objective of the ISI strategy was to stimulate the start-up and growth
of industries as well as enhance indigenous participation by altering
the ownership structure and management of industries, it was
characterized by a high degree of technological dependence on foreign
knowhow to the extent that the domestic factor endowments of the country
were grossly neglected. The focus on an ISI strategy as the cornerstone
of industrial development efforts during the period of the First Plan
therefore seemed to have neglected many of the factors required for
managing the emergent industrial sector and in particular, the
management of technologies transferred or acquired. The Second National
Development Plan (1970-74), attempted to address the limitations of the
ISI strategy, and placed emphasis on ‘the upgrading of local production
of intermediate and capital goods for sale to other industries’. This
was the first systematic effort to create an industrial structure linked
to agriculture, transport, mining, and quarrying. The Second Plan
coincided with Nigeria’s newly acquired status as a major petroleum
producing country. As the economy benefited heavily from enormous
foreign exchange inflows, the government embraced ambitious and costly
industrial projects in sectors such as iron and steel, cement, salt,
sugar, fertilizer, pulp and paper, among others.4 According to the plan,
the establishment of industrial projects during this period was
inspired by the need to increase the earning power of the populace; to
minimize social tension by generating more employment; to make essential
goods easily available; and to lay the foundation for a self-sustaining
economy. The shallow nature of Nigeria’s technological capacity,
however, prevented the economy from moving beyond the elementary phases
of these projects, and indeed, virtually all of these projects have
today either been shut down or operate at very low capacity.
1.2 STATEMENT OF THE PROBLEM
It
is the deficit of visionary leadership and long-term planning that has
prevented locally made goods and other local industrial clusters from
becoming global manufacturing hubs. Nevertheless, the current economic
realities in the country have pushed the government at both national and
sub-national levels to start looking inwards. Aba-made products are now
receiving some attention.
On October 1, 2016, the Abia State
government launched an e-commerce site, MadeInAba.com.ng, to make it
possible for Aba-made merchandise to be retailed across the country.
MadeInAba.com.ng is a much larger market that includes an online retail
store and physical stores to offer wholesale and retail services. A
strategic engagement of the Nigerian government in the production of
this resource as well as supporting entrepreneurs in the country, are
viable approaches for achieving the competitiveness of the Nigerian
economy sought by the current administration’s economic plan. Moreover,
supporting the manufacturing sector in the south-eastern part of the
country would go a long way in boosting the political capital of
President Muhammadu Buhari in that region. In all, both the government
and the private sector have major roles to play in achieving economic
security for all Nigerians, it is against this backdrop that the
researcher intends to investigate the impact of local production on
Nigeria economy.
1.3 OBJECTIVE OF THE STUDY
The main objective
of the study is to investigate the impact of local production on
Nigeria’s economy. To aid the completion of the study, the researcher
intends to achieve the following specific objectives:
i) To ascertain the impact of made in Nigeria goods on the economic growth of Nigeria
ii) To investigate the role of local production in job creation
iii) To ascertain the relationship between local production and job creation in Nigeria
iv) To investigate the role of government in promoting local production
1.4 RESEARCH HYPOTHESES
To aid the completion of the study, the following research hypotheses were formulated by the researcher
H0: made in Nigeria goods has no significant impact on the economic growth of Nigeria
H1: made in Nigeria goods has a significant impact on the economic growth of Nigeria
H02: there is no relationship between local production and job creation in Nigeria
H2: there is a relationship between local production and job creation in Nigeria
1.5 SIGNIFICANCE OF THE STUDY
It
is believed that at the completion of the study, the findings will be
of great importance to the federal government, as the result of the
findings will serve as a guide in formulating policies that will booster
locally made product in the country, the study will also be useful to
the state and local government, as the study intends to explore the
benefit of local production in terms of revenue generation and job
creation at the local and state level. The study will also be of great
importance to researchers who intends to embark on study in a similar
topic as the study will serve as a guide to further studies. Finally the
study will be of great importance to student teachers lecturers and
academia as the findings will add to the pool of knowledge already
available.
1.6 SCOPE AND LIMITATION OF THE STUDY
The scope of
the study covers local production and its impact on Nigeria economy.in
the cause of the study, there were some factors which limited the scope
of the study:
Time factor: time was not on the researchers to consult
various sectors of the economy to review employees or given out
questionnaire to various institutions on the effect of government
revenue policies.
As we all know, time is never our friend. The time
scheduled for the completion of this research thesis was too short. As a
result, generating information/data was strenuous as it coincides with
final year examination period, which needed attention.
Finance: this is another barrier that limited the researcher’s work.
Available resources: was unavailable for the research work
1.7 DEFINITION OF TERMS
Production
Production
is a process of combining various material inputs and immaterial inputs
in order to make something for consumption. It is the act of creating
output, a good or service which has value and contributes to the utility
of individuals
Economy
An economy is an area of the production, distribution, or trade, and consumption of goods and services by different agents
Economic growth
Economic
growth is the increase in the inflation-adjusted market value of the
goods and services produced by an economy over time. It is
conventionally measured as the percent rate of increase in real gross
domestic product, or real GDP.
1.8 ORGANIZATION OF THE STUDY
This
research work is organized in five chapters, for easy understanding, as
follows: Chapter one is concern with the introduction, which consist of
the (overview, of the study), statement of problem, objectives of the
study, research question, significance or the study, research
methodology, definition of terms and historical background of the study.
Chapter two highlight the theoretical framework on which the study its
based, thus the review of related literature. Chapter three deals on the
research design and methodology adopted in the study. Chapter four
concentrate on the data collection and analysis and presentation of
finding. Chapter five gives summary, conclusion, and recommendations
made of the study.
