...Linnskog 03.06.2008 Economic Development through Globalisation in Nigeria An analysis of Shell & the IMF Structural Adjustment Programs Sven Bokhari 820619-P291 Fabrizio Del Duca 791225-P114 Group number: 1983 Summary Date: Level: Authors: 2008/06/03 Master thesis in International Business and Entrepreneurship, 10p (15ECTS) Sven Bokhari Västerås Date of birth: 19820619 Fabrizio Del Duca Västerås Date of birth: 19791225 Title: Economic Development through globalisation in Nigeria. An analysis of Shell & the IMF Structural Adjustment Programs Leif Linnskog, Ph.D. Tutor: Research Question: Can globalisation be seen as positive or negative for the Economic Development of Nigeria? A focus on Shell and the International Monetary Fund Research Issue: Globalisation in its current form is viewed in the Western world as a positive influence for the Economic Development of under developed countries. However these views on the benefits brought to developing countries have been frequently disputed. The research we are undertaking is a pilot study based on documentary research. Our source of information is secondary data such as books, articles, newspapers and journals. The study employs a qualitative approach. Even though globalisation is often viewed as positive we have discovered that this is not always the case in relation to its effects in Nigeria. Judging from our analysis, globalisation through the IMF and Shell has had an overall negative impact on Economic Development...
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...INTRODUCTION Nigeria, officially the Federal Republic of Nigeria, is a federal constitutional republic comprising 36 states and its Federal Capital Territory, Abuja. The country is located in West Africa and shares land borders with the Republic of Benin in the west, Chad and Cameroon in the east, and Niger in the north. Its coast in the south lies on the Gulf of Guinea on the Atlantic Ocean. The three largest and most influential ethnic groups in Nigeria are the Hausa, Igbo and Yoruba. In terms of religion Nigeria is roughly split half and half between Muslims and Christians with a very small minority who practice traditional religion. The people of Nigeria have an extensive history. Archaeological evidence shows that human habitation of the area dates back to at least 9000 BCE. The name Nigeria was taken from the Niger River running through the country. This name was coined by Flora Shaw, the future wife of Baron Lugard, a British colonial administrator, in the late 19th century. Since 2002 there has been a spate of clashes in the north of the country between government forces and the Boko Haram militant group which seeks to establish Sharia law. Nigeria is the most populous country in Africa, the seventh most populous country in the world, and the most populous country in the world in which the majority of the population is black. It is listed among the "Next Eleven" economies, and is a member of the Commonwealth of Nations. On October 1, 1960, Nigeria gained its independence...
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...The debt crisis of Nigeria and Greece Introduction National debt is a problem that can inflict any country including the developed countries. Almost all countries go into budget deficit one way or the other and end up borrowing money. The most direct effect of the government debt is to place a burden on future generations of taxpayers. When these debts and accumulated interest come due, future taxpayers will face a difficult choice. Inheriting such a large debt cannot help but lower the living standard of future generations. In the 1960s and 1970 some developing countries were encouraged to borrow money to service old debts and also to finance development projects in their country like infrastructure. This has been necessitated by the availability of huge oil earnings deposited by OPEC member countries and were eager to lend at very low rates. Moreover, it is misleading to view the effects of government debt in isolation. Government debt can be divided into two categories namely domestic debt and international debt. The International debt is facilitated by the formation of such institutions like the International Monetary Funds (IMF) the International Bank for Construction and Development (World Bank). Governments borrow money from the private sector and foreign governments if they can't pay for all their spending with taxes and government revenues. A government will issue bonds at bond auctions every so often and market participants will come in and bid for them. Market participants...
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...BANKING REFORMS IN NIGERIA AND ITS IMPLICATION FOR ECONOMIC DEVELOPMENT A CASE STUDY OF ZENITH BANK PLC CHAPTER ONE INTRODUCTION 1.1 Background of the Study For more than two decades after independence, the Nigerian financial system was repressed, as evidenced by ceilings on interest rates and credit expansion, selective credit policies, high reserve requirements, and restriction on entry into the banking industry. This situation inhibited the functioning of the financial system and especially constrained its ability to mobilize savings and facilitate productive investment. In Nigeria, we have eighty-nine banks many of which have a capital base of less than US$ 10 million. This section will set out some of the factors that necessitated the need for major banking sector reforms. Through financial intermediation, banks are supposed to facilitate capital formation and promote economic growth by operating in a safe and sound manner. In the past, some financial institutions showed glaring inability to maintain an efficient flow of funds within the economic system. The sharp practices of some Banks together with the unsoundness of others led to a wide spread of financial sector distress and losses to depositors. It has been seen as a paradox that despite the size of the economy, the country’s reserves are still deposited in foreign Banks due to the low capacity of the local Banks. The sector has been highly concentrated structurally as the ten largest Banks account for...
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...International Investment Report - British Petroleum in Nigeria Group D June 6, 2015 Table of Contents Introduction 3 Country Evaluation 6 Industry Overview 9 Regulatory structure 9 Competition – Major and minor competitors 12 Local financing options for the expansion 12 Overall attractiveness of the industry 13 Entry Strategy 13 Recommendations 17 References 20 Introduction Nigeria in West Africa is about twice the size of California in the US but is the largest country in Africa. Just over 160 million people live in this country with approximately 800,000 of them living in the capital city of Abuja which is located in the very center of Nigeria. (Nigeria) Nigeria has two distinct reputations. One as a corrupt and violent country that is not highly recommended for tourist type visitations (although it does have incredibly interesting historical sights) and the other for being the country visited mostly for unbelievably lucrative business transactions involving oil and gas. The Nigerian people live mostly in poverty in a country where oil and gas exports total billions in revenue. This is due to the fact that the Nigerian government has total control over their property rights. In addition corruption within that government runs rampant. According to an article by Michael Burleigh 70% of Nigerians live below poverty level struggling to survive. (Burleigh) What is even more interesting in a country rich in oil and gas is that the poverty...
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...INTERNATIONAL FINANCIAL INSTITUTIONS ROLE OF GLOBAL FINANCIAL INSTITUTIONS International financial institutions (IFIs) are financial institutions that have been established by more than one country, and hence are subjects of international laws. Their owners or shareholders are generally national governments, although other international institutions and other organizations occasionally figure as shareholders. The most prominent IFIs are creations of multiple nations, although some bilateral financial institutions exist and are technically IFIs. Many of these are multilateral development banks (MDB). WHAT ARE INTERNATIONAL FINANCIAL INSTITUTIONS (IFI’S)? World Bank Group (WBG): * International Bank for Reconstruction and Development (IBRD) * International Development Association (IDA) * International Finance Corporation (IFC) * Multilateral Investment Guarantee Agency (MIGA) * International Centre for Settlement of Investment Disputes (ICSID) International Monetary Fund (IMF) Regional development banks, such as: * African Development Bank (AFDB) * Asian Development Bank (ADB) * Inter-American Development Bank (IADB) * Bank of the South * European Bank for Reconstruction and Development (EBRD) Other regional financial institutions e.g. European Investment Bank (EIB) Export Credit Agencies of individual country governments, such as: 1. US Export Import Bank (EXIM) 2. Japan External Trade Organization Hermes Kreditversicherungs...
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...CHAPTER ONE 1.0 INTRODUCTION 1.1 BACKGROUND OF THE STUDY For decades now, Nigeria has been experiencing disappointing performance in terms of growth in gross domestic product (GDP) and the general development of her economy. As a result, there’s no improvement in the level of poverty. In the 90s, came the era of globalization which connotes external opening and increased role of markets domestically (i.e. the market economy). To the developing world, market economy is a modern way of turning the economy around. The essence of globalization is to move the economy towards external liberation, focusing on market oriented economic system, export-led strategy and stabilization of the economy. In Nigeria, it was the era of structural adjustment programme in collaboration with the IMF and World Bank. The governments in the developing world, believes that it is more desirable to globalize which simply means to open up the economy and penetrate international markets. In time past, the world economy has undergone a fundamental shift towards an integrated and coordinated global division of labour in production and trade. In the 1950s and 1960s, productions were within national boundaries. The increase of oil prices in the late 1970s and the contractionary monetary policies of the United States during 1979 and 1982 period led to the increased interest rates and consequently indebted developing countries found they unable to service their debts. Continual refinancing was the only...
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...VOCATIONAL TECHNICAL EDUCATION, THE STATE AND CITIZENRY IN NIGERIA 1 Bamidele Aturu 2 Introduction Let me begin by expressing my appreciation to the School of Vocational Education of the Federal College of Education (Technical) Akoka for inviting me to share my thoughts on vocational technical education in our country. I feel highly privileged on account of the invitation and do hope that I would succeed in falling back on my residual knowledge as an educationist in order not to betray the confidence of the school, although personal circumstances occasioned by state harassment compelled me to seek accommodation in another profession. The way the topic is couched suggests that we are to limit our discussion of vocational education to its technical segment. In other words our focus shall be only on technical vocational education. But then we need to understand the meaning of general vocational education. A definition that I prefer for its simplicity and comprehensiveness defines vocational education as ‘any form of education whose primary purpose is to prepare persons for employment in recognised occupations’ (Okoro, 1993:1) 3. It is obvious therefore that vocational education is a term that is more all-embracing than technical education which O.M. Okoro defines as ‘a postsecondary vocational training programme whose major purpose is the production of technicians’ 4. The National Policy on Education defines technical and vocational education ‘as a comprehensive term referring to...
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...(2008) emphasized the role of the Government and its influence on Economic Development. THE VARIABLES OF ECONOMIC DEVELOPMENT This...
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...Abstract The relationship between inflation and growth has remained a controversial one in both theory and empirical findings. Over the past couple of years, a lot of economists have claimed that an increase in economic growth leads to an increase in inflation and that decreased growth reduces inflation. There are several theories to explain the nature and existence of the inflation-economic growth with the theories suggesting that variety of possible conclusions. These include: Classical, Keynesian, Neo-Keynesian, Monetarist, Neo-classical and Endogenous growth theories. Studies have shown that inflation and its variability have significant real costs to the economy with several of the studies indicating that a 10% inflation rate can cause up to 3% loss in the GNP thus many governments have adopted inflation targeting as a dominant economic policy framework. While all the studies agree with Bruno and Easterly conclusion that inflation threshold will occur somewhere below 20% they differ significantly on the specific threshold rates. Most of the studies reviewed conclude that there is indeed a significant negative relationship between inflation and economic growth at high inflation rates in the long run. However, while many sophisticated techniques have been applied in an attempt to explain the relationship between inflation and economic growth; many key questions still remain unresolved. Introduction: The objective of this paper is to study the relationship between...
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...CORRUPTION IS REGRESSIVE TAXATION CORRUPTION The Merriam Webster’s collegiate dictionary of English Language says the word The word corruption originated from the Latin word rumpere meaning to break. This means that something is broken such a law or ethic, protocol or code of conduct. The World Bank and IMF see corruption as the abuse of public office for private gains. Osoba (1996) defines corruption as an antisocial behavior conferring improper benefits contrary to legal norms and normal norms and which undermines the authorities capacity to secure the welfare of the citizens. Finally Todaro and Smith (2009) sees corruption as the abuse of public trust for private gain. Corruption is a global issue which is endemic to most governments of the world. It is the biggest obstacle to development. According to Tanzi (1998) corruption is the intentional noncompliance with arms length relationship aimed at deriving some advantage from this behavior for oneself or for related individuals. However, not all act of corruption culminate into bribe taking. For example not reporting to duty for which you receive monthly salary for is an act of corruption, because you are committing economic sabotage by not giving commensurate value for your salary. A governor or president who diverts projects meant for the equal development of all regions to his town or village is an act of corruption that doesn’t involve taking or giving a bribe. Therefore corruption has no universally...
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...Risk Management Still at Rudimentary Stage in Nigeria’ Deputy Governor, Financial System Stability, Central Bank of Nigeria (CBN), Dr. Chiedu K. Moghalu, recently spoke on “Risk-Ability: Risk Management Knowledge and Infrastructure for Nigeria’s Financial Services Industry,” at a Chief Risk Officers’ retreat. Obinna Chima, who was there presents the excerpts: Financial Crisis From the tulip mania in Holland in the mid-1630s to the ultimately disastrous speculative rush for the shares of the Mississipi Company promoted by John Law and his Banque Royale in Paris in the early 1700s, from the South Sea Bubble in London in the same period (to which Sir Isaac Newton lost a princely £20,000) to the great Wall Street Stock Market boom of the 1920s that preceded the Great Crash of 1929 and the Great Depression and on to the global financial crisis of 2008 – 2009, the history of finance over the past 500 years has been marked by frequent booms and busts. Historical evidence suggests, as the famous American economist John Kenneth Galbraith put it, “that the financial memory should be assumed to last, at a maximum, no more than 20 years. This is normally the time it takes for the recollection of one disaster to be erased and for some variant on previous dementia to come forward to capture the financial mind.” If this is so, and we are condemned to cycles of financial implosions that wipe out economic value, is the modern science of risk management doomed? It isn’t. The future...
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...has it that, a combination of domestic and foreign participation in the domestic debt market generates liquidity, and lowers the national yield curve. This paper examines these theoretical assertions and relations as it applies to the Nigerian capital market. Using data from the Central Bank of Nigeria, we use the methodology of applied financial econometrics to analyse the various relationships. Keywords: Domestic bond market, bond market liquidity, capital market size, national yield curve, Nigeria Eurobond, capital market, foreign participation. Introduction This paper essentially examines how the growth of domestic bond market and foreign participation in the same market function to impact the development and growth of the Nigeria capital market and enhance financial stability. Peiris (2010) noted, “A vibrant and deep local currency domestic bond market promotes financial stability and economic growth”. Also a good and functioning domestic bond market is useful in the conduct of monetary policy. A functioning and stable domestic bond market in Nigeria is important for the West African region, Nigeria being the largest economy in the sub-region. Until 2003, Nigeria could not participate in the international debt...
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...Introduction Globalization, widely recognised as a positive influence, is actually harming the socioeconomic development of the majority of African and developing countries, it has contributed to their decline in all sectors of the economy. Before further elaboration, it is fundamental to define the term ‘’globalization’’. Globalization is defined by the United Nations Poverty and Development Division, as “an increasing interaction across national boundaries that affects many aspects of life: economic, social, cultural and political” (Chanboracheat, 2012, p.1). However, “While many people warmly welcome these integrations, there are some who raise doubts over its benefits for developing countries” (Chamboracheat, 2012, p.1). The benefits of globalization are fairly widely recognized: a) decrease in technological differences, b)knowledge and information become accessible to all, c) the rights of nature and animals are more protected than before and d) nations of the world become more interdependent. Sports, entertainment of all kinds reinforce cohesion and reconciliation between different nationalities. Countries suffering from natural or human disasters quickly receive support from other countries etc. This support alleviate the suffering of victims, and man becomes a citizen of the world. However, if one does a cost-risk and profit-effect analysis, what can be said to the overall effect of globalization? Is it positive? Is it negative? Globalization, as it exist today...
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...CHAPTER ONE 1.0 INTRODUCTION 1.1 BACKGROUND OF STUDY Breaking away from the shackles of ‘colonialism’ (British control) the oil rich Nigeria got her independence in 1960. Having being plagued by political instability, the negative impact of a prolonged military rule, corruption, unemployment, inadequate infrastructure and poor macroeconomic management for a long period of time, the nation currently undertakes certain reforms under a new reform minded administration. Prior to the present democratic rule, Nigeria's former military rulers failed to diversify the economy away from its overdependence on the capital-intensive oil sector, which provides 20% of GDP, 95% of foreign exchange earnings, and about 80% of budgetary revenues. The largely subsistence agricultural sector has failed to keep up with rapid population growth - Nigeria is Africa's most populous country - and the country, once a large net exporter of food, now must import food. Following the signing of an IMF stand-by agreement in August 2000, Nigeria received a debt-restructuring deal from the Paris Club and a $1 billion credit from the IMF, both contingent on economic reforms. Nigeria pulled out of its IMF program in April 2002, after failing to meet spending and exchange rate targets, making it ineligible for additional debt forgiveness from the Paris Club. In 2003, the government began deregulating fuel prices, announced the privatization of the country's four oil refineries, and instituted the National Economic...
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