1.1 BACKGROUND OF THE STUDY
It is the aspiration of every national economy to achieve the fundamental macro-economic goals, which include; attainment of full employment level, balance of payment equilibrium, and non-inflationary economic growth (price stability and economic growth). Nigeria has invariably been pursuing the achievement of these broad economic goals. The national economic development aspiration of the Nigerian economy has been that of altering the structure of production and consumption activities, so as to diversify the economic base, reduce dependence on oil and imports, all in bid to put the economy back on a path of self-sustaining, inclusive and non-inflationary economic growth, thereby reducing poverty (Ajakaiye, 2013). Industrialization plays a vital role in the economic development of underdeveloped countries. As the historical record shows, the developed countries of the world broke the vicious cycle of poverty by industrializing, rather than focusing on agricultural or the production of national resources. Industrialization generally raises productivity, creates employment, reduces exposure to risk, enhances income-generating assets of the poor and helps diversify exports (Iwuagwu, 2011). In Nigeria, the quest for industrialization to facilitate economic development has remained a focal issue of successive administrations in Nigeria since independence (Ekpo, 2014; Adamu and Iyoha, 2015). This is demonstrated by the multiplicity of industrial policies and strategies, initiated and implemented by the country over the period. Beyond this, successive governments (including the present) seem unable to exploit the critical role of industry in economic development. This is exemplified by the country’s continuous reliance on petrodollar (now increasingly becoming unreliable) and the chequered industrial progress recorded overtime. Economic development is also defined as the quantitative and qualitative changes in the economy such action like human capital, critical infrastructure and regional competitiveness. Some scholars believe that proper pursuit of industrialization leads to growth of the national output. Industrialization as defined by Obioma and Ozughalu (2014) is the introduction and/or expansion of industries in a place, region, country, etc. According to the duo, industrialization brings about economic growth through the increase in productivity and enlargement in market size. In his book, “Growth and Development”,(2014) Thirlwall said, the importance attached to industrialization by developing countries (Nigeria inclusive), lies in the close association that appears in to exist between industrialization and real per-capita-income and between the growth of output as a whole. This latter observed relationship is summed up in the maxim “manufacturing as the engine of growth”. As also noted by Uwubanwen (2014), Developing nations strive to industrialize their economies for many reasons. Among these are the desire to increase national income, productivity and hence the capacity of the economic system to deliver higher levels of wealth and welfare to the people, secure further employment, expand the market for local raw materials, and improve the stability of foreign exchange position through proper import substitution and export promotion industries. It is in recognition of the important roles played by industrialization in the structural transformation of the economy, that the Nigerian government at different times regards genuine industrialization (as shown in the different national development plans) as a mover of the economy towards that state of economic independence (freedom). Hence, over the years, a number of policies, measures and strategies, like the restrictive import tariffs on commodities majorly consumed by individuals, creation of export zone area; import substitution strategy; local content initiative; granting of pioneer status to some industries; tax holidays, etc, have been embarked upon to encourage industrial development within the ambit of the available resources. Globally unemployment is on the increase and poverty levels are also on the increase. The emphasis for investment arises so that employment can be created and poverty levels reduced. Similarly, industrialization is a key to revenue generation, wealth creation and poverty eradication. It therefore becomes important to build the infrastructure that will make industry operate and bring about the needed economic growth. The structure of the Nigerian economy is one which was dominated by the oil and gas sector followed by agriculture and then industry occupying the least position. The dominance of oil and gas sector brought about over 80% revenue to the country, making it to be the driver of the economy, leading to neglect in agriculture and decline in industry. Chete, Adeoti and Ogundele (2016) explain the structure of the Nigerian economy to be one driven by the oil and gas sector accounting for 95% of export earnings and 85% of government revenue between 2011 and 2012, with the industrial sector consisting of mining, manufacturing and services accounting for a tiny portion of 10% of the economy. The industrial policies and strategies of development were adoption of import substitution strategy, expansion of indigenous equity participation in foreign owned enterprises, provision of integration, linkages and diversification of industrial increased domestic resources content of industrial product and provision of financial and manpower resources to promote research and adoption of technology to encourage the small and medium scale industries and public sector participation and control of some large industrial products such as iron. To withstand the rising problems of the sector and economy in general, Nigeria embarked on structural adjustment programme (SAP) in 1986 on the assumption that structural adjustment programme (SAP) would corrects these problems. It has important implication on both the government and industry. It has brought government re-appraised of the regulatory environment, the structure of protection for local industries and the package of incentives available.
1.2 STATEMENT OF THE PROBLEM
More often than not, people commonly speak or argue that the Nigerian economy has myriad or hydro headed economic problems. This means that people clearly observe the macroeconomic instability in Nigerian states. Okafor, (2010) with regard to Nigeria, despite all efforts, since October 1960 the level of industrialization remains very low even with oil wealth. This has been the situation notwithstanding the varied strategies that has been put to use overtime for its industrialization (Uzechukwu, 2015). Even though the economy was adjudged to be fairly good it, however, fluctuated because the real Gross Domestic Product (RGDP) was unstable. Also, other economic indicators such as industrial output, foreign direct investment, interest rate, foreign exchange rate and inflation rate show some symptoms of ailing economy Amakom, (2018). The industrial sector is known to be the strength of the value added processes in many economies. Nigeria is wanting to industrialize must encounter some problems which are militating against industrialization for the purpose of this study; it is pertinent to survey those problems which are forming obstacles to industrialization. Industrial sector encountered the problem of low price
elasticity of export and lack of comparative advantage. This means that Nigeria share of foreign exchange market cannot appreciate despite the numerous incentives granted to the industrial sector. The absence of an indigenous entrepreneurship class couple with other problems of multinational corporation affect the structure and influence the nature of utilization of scientific and technological labour for national development. Realizing that industrialization can indeed have some adverse effect on the economic growth and development of the country, one will logically ask low effective are the industrialization policies in Nigeria?
1.3 AIMS OF THE STUDY
The major purpose of this study is to examine industrialization and economic development in Nigeria. Other general objectives of the study are:
1.4 RESEARCH QUESTIONS
1.5 RESEARCH HYPOTHESIS
H0: The industrial sector output has no significant impact on Gross Domestic Product in Nnewi, Anambra state.
H1: The industrial sector output has a significant impact on Gross Domestic Product in Nnewi, Anambra state.
H0: There is no significant relationship between industrialization and economic development in Nnewi, Anambra state
H1: There is a significant relationship between industrialization and economic development in Nnewi, Anambra state
1.6 SIGNIFICANCE OF THE STUDY
The significance of this study lies in the fact that it will expose the extent to which industrialization has contributed to economic development of Nigeria. It will highlight some obstacles hindering increase in industrialization and industrial output in Nigeria. This work will be relevant to entrepreneurs and government by directing them on the easiest means of embarking on industrial development plan. This work also lies in the fact that it will add to the already existing literature on industrial output. Furthermore, this research work will assist students of economics, government and real potential industrialist, investors and other related coursed. Other researchers will see this work veritable material in their field of study. Finally, since no knowledge is a waste, readers of this work will find it interesting to know that high industrialization is the shortest route to economic development.
1.7 SCOPE OF THE STUDY
The study is based on industrialization and economic development in Nigeria. A critical analysis of Nnewi in Anambra state
1.8 LIMITATION OF STUDY
Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.
1.9 OPERATIONAL DEFINITION OF TERMS
Economic Growth: This can be defined as the increase in the production and consumption of goods and services. It is also the increase in the output that the economy produces over a period of time.
Economic Development: This is refers to the sustained, concerted actions of policy makers and communities that promote the standard of living of the economy. Economic development is also defined as the quantitative and qualitative changes in the economy such action like human capital, critical infrastructure and regional competitiveness and so on.
Industry- An industry is a group of firms that produce similar product or a group mainly in manufacturing physical services
Export Promotion- This is defined as a strategy for promoting economic development in less developed countries. This involves running an open economy relying on a foreign market
Gross Domestic Product (GDP): Refers to the money value of goods and services produced in an economy during a period of time irrespective of the people.
Gross Domestic Product (GDP) - The gross domestic product is the market value of all officially recognised final goods and services produced within a country in a given period of time.
Import Substitution- A strategy for the industrialization of less developed countries, concentrating initially on replacing imports by domestically produced substitute
Industrialization- This is the process of moving resources into the industrial sector or it is the transformation methods of production involving the use of traditional or modern equipments or mechanized equipments.
OTHER SIMILAR ECONOMICS PROJECTS AND MATERIALS