CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Most developing nations define industrialization as a central
objective of their economic policy they see; industrialization goes
with agricultural progress as an integral part of growth and
structural change. Some economist and analysts are of the view
that industrialization plays a major role in the economic growth
and development of any nation.
Thus in this research work, effort is made to assess the
impact of industrialization on economic growth of Nigeria. Before
colonial rule in Nigeria, there were numerous economic activities
undertaken by Nigerians. Nigerians were among the most active
and industrious group of people in Africa. The economic activities
were based mostly on primary production especially on
agriculture. Such activities were engaged in, included farming,
hunting and quarrying. The coming of the white men to Nigeria
recorded more changes in life style of Nigerians. The economy
was changed from its agricultural based to a market based for
imported manufactured product.
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The colonial masters at the same time took the Nigerian
economy as a base for the supply of resources both mineral and
agricultural raw materials for industries in their own country.
The worst aspect of it was that they exploited these resources at
a cheap price, but when their product was brought into Nigeria,
the prices were placed so high to exploit the nation.
Furthermore, the colonial lords at no times endeavoured to
industrialize Nigeria, and Nigerians were not motivated to involve
themselves in industrial activities. All these contributed to
Nigeria being both technologically backward and industrious.
The attainment of political independence by Nigeria in 1960 made
it possible for the 1st national development plan in Nigeria in
1962. The main aim of this plan was for industrialization.
Industrialization in Nigeria was aimed at the achievement of
import substitution and even export promotion.
Industrial development and economic growth are necessary
in any developing country. In an economy where there is
availability of industries, the majority of unemployed people will
engaged themselves in productive activities. If industrial
development is well encouraged it will be of great help to the
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developing economy and it will also go a long way in enhancing
economic growth.
Industrialization is the process through which the primary based
economy becomes industrialized.
According to Ojo (1987:256) industrialization could be seen
as the process by which the industrial sector of such a country or
region increases its share in gross domestic product (GDP),
employment, poverty alleviation efforts, investment and so on.
From the works of Shaw and Emer(2000:13) industrialization is
the process where manufacturing becomes increasingly
important in the economic structure of the society.
According to Holis, Bacheney (1999:624) said that
industrialization is the main hope of most countries trying to
increase their level of income. Industrialization in Nigeria has the
idea of transforming the peasant or idle workers of Nigeria into
full time or part time industrial workers and on the other hand it
will transform the structure of Nigerian economy. The standard of
living of the people in the economy will be improved and
economic growth is gingered.
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1.2 STATEMENT OF PROBLEMS
The need for industrialization has become one of the problems
facing Nigeria. Not with standing that industrialization can lead
to economic development, creation of employment pportunities,
increases in productivity, increase in foreign exchange etc.
Insufficient capital is one of the reason Nigerian economy is
termed underdeveloped or developing. Huge amount of capital is
needed for an industrial development because it is a capital
project that needs both labour intensive and capital intensive in
abundant. When such funds are made available for
industrialization and it is not properly utilized, it tends to create
problems in the economy.
Presently in Nigeria, there are sources of finance specified to
industrial sector made available by the government but in spite of
them many industries have gone into collapsing while a good
number are making effort to survive. The provision of finance for
industries is generally problematic world-wide and is therefore
not specific to developing countries like Nigeria.
The study is therefore necessary to enable a thorough
investigation of financial problems of the industrial sector
especially that of the manufacturing industries and various
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government agencies setup to provide credit facilities to the
industrial sector to ensure the continual growth of this sector for
rapid economic development of this nation. This work intends to
find out,
(a) Does industrialization have any impact on economic growth
in Nigeria?
(b) What is the nature or relationship between economic growth
and industrialization?
1.3 OBJECTIVES OF THE STUDY
It has been observed that most poorly industrialized
countries of which Nigeria is one, has not realised their economic
development goal even with the existence of manufacturing
industries within the economy.
These are the objectives of the study.
(a) To analyse the performance of industrialization and its
effect to Nigerians in economic growth.
(b) To analyse the relationship between industrialization and
economic growth.
(c) To determine the contribution of industrialisation to
Nigerian economic growth.
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(d) To identify the determinants of industrialization in Nigeria.
(e) To make policy recommendations.
1.4 STATEMENT OF HYPOTHESIS
The study is guided with both null and alternative hypothesis
which is denoted using Ho for null hypothesis and Hi for
alternative hypothesis.
Ho- Industrialization has no significant effect on Nigerians
economic growth.
Hi- Industrialization has significant effect on economic growth.
1.5 SIGINIFICANCE OF THE STUDY
The significant of the study lies on the fact that it will
expose the extent to which industrialization has contributed to
the economic growth in Nigeria. It will highlight some obstacles
hindering Nigeria from becoming an industrialized nation.
This work will be relevant to entrepreneurs and government
by directing them on the easiest means of embarking on an
industrial development plan. It will help in establishing the
relevance of industrialization in order to uplift the economy. This
study will reveal that the industrial sector is engine for economic
growth and development.
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This work will assist students of economics, estate management,
urban and regional planning etc on how to get jobs. This means
that with the help of established industrial sector, poverty will
reduce and eliminated because people will be employed and it
will increase their standard of living and the economy to grow.
1.6 SCOPE OF THE STUDY
The research work deals with the impact of industrialization on
economic growth in Nigeria. This research work covers the period
of years (1980-2010) with reference to limitation in a research
project like this.
The data used is a secondary data which was obtained from the
publication of Central Bank of Nigeria. The analytical tools
employed on this research include t-test and regression analysis.
1.7 LIMITATION OF THE STUDY
A study of this nature cannot be done without some
problems and as such it was considered by many factors namely
time, finance and data.
TIME- Here the researcher was having lectures, preparing for
examination, engaging in such activities and domestic works as
well.
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FINANCE- financial inadequacy was the major limitation for this
work. The researcher was financially independent as a student
and materials needed for this research was not provided.
DATA- the controversial nature of Nigerian data delayed this
work. It took the researcher a lot of time before the
harmonization of data used,
1.8 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.
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IndustryAn
industry is a group of firms that produce similar product or a
group mainly in manufacturing physical services
Export PromotionThis
is defined as a strategy for promoting economic development
in less developed countries. This involves running an open
economy relying on a foreign market
EnterpreneurA
person who organises, operates and assumes the risk for a
business venture. He receives profit and bears losses.
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 SubstitutionA
strategy for the industrialization of less developed countries,
concentrating initially on replacing imports by domestically
produced substitute
IndustrializationThis
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.