TRADE LIBERATION AND THE MANUFACTURING SECTOR IN NIGERIA 2000-2009
TABLE OF CONTENT
Table of content
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
2.0 LITERATURE REVIEW
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
DATA PRESENTATION AND ANALYSIS AND INTERPRETATION
4.2 Data analysis
This study was on trade liberation and the manufacturing sector in Nigeria 200-2009. The total population for the study is 200 staffs of CBN, Oyo. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made accountants, administrative staff, customer care officers staffs and HRM were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies
- Background of the study
International trade has existed through much of history and the motivation is hinged to the fact that the distribution of natural, human, and capital resources varies across economies. Different technologies or allocations of resources are required for the efficient production of various kinds of traded goods services. Moreover, preferences for traded goods and services also differ between countries. As a result, international trade has provided the means through which countries have expanded their range of available goods and services and made up for those goods and services in which they are not better off producing. This has resulted in an increasing web of linkages in markets providing new possibilities for upgrading economic activities. It has allowed for worldwide sourcing strategies, which offers new scope for firms to participate in the global market, and also supplying many goods and services on a competitive basis. This interaction of countries in the world economy has been suggested to be an important avenue for countries to promote economic growth and development (Rondinelli, 2003). Foremost in the drive for and shaping of the world trading system is the spread of industrialization from Europe, to the Americas, Asia and Africa; and the enormous technological advances in transportation and communications which have steadily led to reduction in the cost of moving goods, technology, capital, and people around the world (Cairncross, 1997). Developments such as the invention of steamships, construction of railroads and innovation of telegraphs, automobiles, airplanes and the internet have all contributed immensely to making the world a “global village”. These have expanded the horizon of international trade. While the early development of international trade specifically, from the 16th up to the 20th centuries were barely influenced by trade liberalization, by the second half of the 20th century trade liberalization took the center stage in international trade (WTO, 2013). The earliest activities in the direction of trade liberalization can be traced to the period between the 1820s and the 1840s of which, freer trade occurred based on bilaterally agreed reciprocal tariff reductions where agreements with other nations on mutual tariff reductions were done. However, from the late 1840s leading to the start of the second half of the 20th century countries began to unilaterally take decisions on reducing barriers on trade. Notable in this regard, is the repeal of the Britain‟s Corn Laws in 1846 which ended the country‟s use of tariffs previously put in place to protect its agriculture and industry from foreign competition.
The critical role of the manufacturing sector is predicated on the fact that it acts as an engine of growth by broadening the productive and export base of the economy, reducing unemployment and stemming rural-urban drift as well as helping to reduce poverty. Nigeria is an open economy. Accordingly, developments in international circles have profound implications on the path the country is going in terms of the development of her manufacturing sector. It has been the goal of trading with countries to obtain improved and more secure access to markets abroad. This is intended to provide the country with the opportunity to explore economies of scale beyond the limit of the domestic market and facilitate access to foreign exchange with which to finance critical imports needed for development (Adenikinju 2002). It is true that trade and trade policies are important determinants of economic performance. International trade offers opportunities for greater specialization, increased capacity utilization and import of goods and services. Within the Nigerian context, there has been a considerable amount of discussion on the inter-relationship between trade policy reforms, economic performance and manufacturing sector
Statement of the problem
Nigeria’s trade policy has been liberalized with the expectation of a positive effect of increasing the share of manufacturing in GDP, share of manufactured exports in total merchandise exports, and manufacturing sector capacity utilization in line with the government’s projections of the year 1997 for the 22 year 2010. Therefore, given the specified indicators on performance in 2015, concerns arise as to what the effect of freer trade is on performance of manufacturing in Nigeria. From the survey of literature, Adenikinju and Chete (2002) provided firm level evidence on the effects of trade liberalization on productivity in the Nigerian manufacturing sector for the period 1988-1990. Beyond 1990, deliberate steps have been undertaken by the government of Nigeria towards greater liberalization of trade whose intended effects is unknown, necessitating additional research. On the influence that productivity has on firms‟ participation in foreign markets the study by Rankin, Soderbom, and Teal (2006) on Sub-Saharan Africa, found that participation in exports was associated with higher productivity. Nevertheless, their study provides evidence only for the influence of productivity on the probability of exporting but, not on the share of sales exported. Furthermore, while studies by Goldar and Aggarwal (2005), Wong (2007), and Sheikh and Ahmed (2011) supported the import-discipline hypothesis for India, Ecuador and Pakistan, respectively, evidence on this relationship is not available in the case of Nigeria.
Objective of the study
The objectives of the study are;
- To determine the effects of trade liberalization on productivity of manufacturing firms in Nigeria.
- To examine the influence of productivity on firms‟ export participation in the manufacturing industry in Nigeria
- To evaluate the effect of trade liberalization on the competitiveness of manufacturing firms in Nigeria.
In the course of this study, three main hypotheses are formulated.
Ho: there are no effects of trade liberalization on productivity of manufacturing firms in Nigeria.
Ha: there are effects of trade liberalization on productivity of manufacturing firms in Nigeria.
Ho: there is no influence of productivity on firms‟ export participation in the manufacturing industry in Nigeria
Ha: there is influence of productivity on firms‟ export participation in the manufacturing industry in Nigeria
1.4 Significance of The Study
Manufacturing is a key sector in an economy. It has been strategic to the wealth creation of developed economies. Through its strong forward and backward linkages with other sectors of the economy, manufacturing is able to raise the general level of economic activities. Given Nigeria’s quest to develop the sector, a study intended at finding out how trade liberalization affects performance of the manufacturing sector is of particular interest, as the findings have implication as to whether the policy path (liberalization) taken is rewarding and worth sustaining. The results of this study provides useful insights to Nigeria’s Federal Ministry of Trade and Investment in handling the country’s bilateral and multilateral trade negotiations, and guides the Federal Ministry of Finance in managing tariff administration in the country. Also, the findings of the study are relevant to the Manufacturers Association of Nigeria (MAN) as it offers important alternatives to improving the activities of firms. More so, the study sought to add to the existing literature on the association between trade liberalization and manufacturing performance in Nigeria
Scope and limitation of the study
The scope of the study covers trade liberation and the manufacturing sector in Nigeria 2000-2009.
The research work has been intended to have an overview analysis of the Nigerian ocean shipping export in relation to it economic development and growth.
It would assess the concept of ocean shipping export in relation to the current level of economic growth given special attention to relationships between ocean shipping export and some indicators of economic growth.
However, due to time constraints and lack of good data base and information sources in Nigeria and worst still because of lack of good data in the required government ministries and parastatals, the research work could not cover all the economic growth information of the country.
Definition of terms
Trade liberation: Trade liberalization is the removal or reduction of restrictions or barriers on the free exchange of goods between nations. These barriers include tariffs, such as duties and surcharges, and nontariff barriers, such as licensing rules and quotas.
Manufacturing sector: The manufacturing sector, as defined by the U.S. government, “comprises establishments. engaged in the mechanical, physical, or chemical transformation of materials, substances, or. components into new products,” as well as those engaged in “assembling of component parts