ECONOMIC DEPENDENCY AND THIRD WORLD UNDER DEVELOPMENT; THE NIGERIA EXPERIENCE, (2000-2020)
- Project Research
- 1-5 Chapters
- Abstract : Available
- Table of Content: Available
- Reference Style:
- Recommended for :
- NGN 5000
Background of the Study
Economic dependency has long been a central theme in discussions surrounding the underdevelopment of third-world countries, particularly in regions like Africa. Nigeria, one of Africa’s largest economies, provides a case study for examining how economic dependency perpetuates cycles of underdevelopment. Economic dependency refers to a situation where a nation relies heavily on foreign economies for its own economic activities, particularly in the areas of trade, investment, and finance. This dependency often results in external control over national resources and policy decisions, limiting the country’s ability to implement independent development strategies. According to Dos Santos (2000), dependency arises when the economies of certain nations are conditioned by the development and expansion of another, leading to a structural imbalance that favors the latter.
The historical context of economic dependency in Nigeria can be traced back to the colonial era, when the British administration established an economic system that was designed to extract raw materials for the benefit of the colonizer. Post-colonial Nigeria has struggled to break free from this legacy. Despite its rich natural resources, including crude oil, Nigeria has been unable to establish sustainable growth independent of global market forces. The economic policies of successive Nigerian governments, such as the Structural Adjustment Programs (SAP) implemented in the 1980s under the guidance of the International Monetary Fund (IMF) and World Bank, have further entrenched dependency by prioritizing foreign investment and export-oriented strategies over local industrialization and self-sufficiency (Ayodele, 2004).
In the 21st century, globalization and neoliberal economic policies have deepened Nigeria's economic dependency. Scholars such as Ake (2002) argue that globalization has exacerbated the structural inequalities between developed and developing nations, as Nigeria remains primarily an exporter of raw materials and an importer of finished goods. This trade imbalance, coupled with a reliance on foreign loans and investments, has reinforced the country's dependence on external economic actors.
The period from 2000 to 2020 has been particularly illustrative of Nigeria's struggle with dependency and underdevelopment. The oil boom of the early 2000s brought significant revenue to the country, but it also deepened Nigeria's reliance on oil exports, which accounted for more than 90% of the country’s foreign exchange earnings (Adelman, 2012). This over-reliance on a single commodity made Nigeria vulnerable to fluctuations in global oil prices, as seen during the global financial crisis of 2008 and the oil price crash of 2014. In both instances, Nigeria's economy contracted sharply, exposing the weaknesses of an economy reliant on a volatile global market (Okonjo-Iweala, 2018).
Moreover, foreign direct investment (FDI), often lauded as a tool for development, has not translated into broad-based economic growth in Nigeria. While FDI has flowed into the oil and gas sectors, it has largely bypassed manufacturing and agriculture, which are critical for sustainable development. This selective investment has reinforced Nigeria’s role in the global economic system as a provider of raw materials, while limiting its capacity for value addition and industrialization (Nnadozie, 2013).
The international financial institutions (IFIs) and multinational corporations (MNCs) that operate in Nigeria play a significant role in shaping the country's development trajectory. IFIs such as the World Bank and IMF, through their loan conditionalities, often promote policies that prioritize debt repayment and fiscal austerity over investments in critical sectors such as education, healthcare, and infrastructure. This has resulted in a situation where Nigeria, like many third-world nations, is trapped in a cycle of debt, making it difficult to pursue independent economic policies (Stiglitz, 2006).
By 2020, Nigeria’s economic outlook remained precarious, with persistent high unemployment rates, poverty, and underdevelopment. The COVID-19 pandemic further highlighted the fragility of Nigeria’s economic system, as the collapse in global oil demand led to a sharp decline in government revenues, forcing the country to seek external financial assistance once again (World Bank, 2020). The pandemic exacerbated existing challenges, including poor infrastructure, inadequate healthcare, and a lack of industrial diversification, all of which can be traced back to the country's history of economic dependency.
Economic dependency continues to be a major factor in Nigeria’s underdevelopment. Despite its abundant natural resources, Nigeria has been unable to develop an independent and sustainable economy. The period from 2000 to 2020 reveals the extent to which global economic forces, coupled with internal policy choices, have perpetuated a cycle of dependency that hinders Nigeria’s development prospects. The study of Nigeria’s experience offers critical insights into the broader challenges faced by third-world countries in breaking free from economic dependency and achieving sustainable development.
1.2 Statement of the Problem
The persistent underdevelopment of Nigeria, despite its rich natural and human resources, points to the deep-seated issue of economic dependency. Nigeria’s reliance on the export of raw materials, particularly crude oil, and its importation of finished goods has entrenched its role in the global economy as a supplier of raw materials, limiting industrialization and diversification. Additionally, the country’s dependence on foreign loans and investments has left it vulnerable to external economic shocks, such as fluctuations in global oil prices and the conditionalities imposed by international financial institutions. This study seeks to investigate how economic dependency has hindered Nigeria's development between 2000 and 2020, with particular attention to the impact of global economic forces, foreign direct investment, and government policies. The central problem is understanding why Nigeria has been unable to break free from its dependency and achieve sustainable development, despite its abundant resources.
1.3 Objectives of the Study
The objectives of this study are to:
-
Examine the historical roots of economic dependency in Nigeria.
-
Analyze the impact of foreign direct investment on Nigeria's economic development.
-
Investigate the role of international financial institutions in shaping Nigeria’s economic policies.
-
Evaluate the effects of Nigeria’s reliance on crude oil exports.
-
Propose strategies for reducing Nigeria’s economic dependency and promoting sustainable development.
1.4 Research Questions
Based on the objectives, the study will seek to answer the following research questions:
-
What are the historical roots of economic dependency in Nigeria?
-
How has foreign direct investment impacted Nigeria’s economic development?
-
What role do international financial institutions play in shaping Nigeria’s economic policies?
-
How has Nigeria’s reliance on crude oil exports affected its economy?
-
What strategies can be employed to reduce Nigeria’s economic dependency and promote sustainable development?
1.5 Significance of the Study
This study holds practical and theoretical significance. Practically, it will offer policy recommendations for reducing Nigeria’s economic dependency and promoting sustainable development. Policymakers, development agencies, and international financial institutions can use the findings to guide the formulation of strategies aimed at fostering economic independence and growth in Nigeria. For instance, the study could inform efforts to diversify the Nigerian economy away from oil dependence by identifying sectors that hold potential for growth, such as agriculture, manufacturing, and technology.
Additionally, the study is significant for international development scholars, economists, and students, as it will provide an in-depth analysis of how economic dependency has contributed to underdevelopment in Nigeria. Theoretically, this study will contribute to the body of knowledge on economic dependency theory and its relevance to third-world underdevelopment. By exploring Nigeria's experience from 2000 to 2020, the study will offer fresh insights into how global economic forces continue to shape the development trajectories of third-world nations. It will also provide a case study for understanding how countries can break free from the cycle of dependency and achieve sustainable development.
1.6 Scope of the Study
The study will focus on the economic dependency of Nigeria and its underdevelopment between 2000 and 2020. It will examine the role of foreign direct investment, international financial institutions, and crude oil exports in shaping Nigeria’s economy. The geographical scope will be limited to Nigeria, with particular attention to key sectors of the economy such as oil, agriculture, and manufacturing. The temporal scope will cover the period from 2000 to 2020, a time frame that includes major economic events such as the oil boom, global financial crises, and the COVID-19 pandemic.
1.7 Limitations of the Study
One of the limitations of this study is the availability of accurate and comprehensive data, particularly on foreign direct investment and its impact on specific sectors of the Nigerian economy. Additionally, the study may face challenges in accessing reliable information on the internal decision-making processes of international financial institutions. Another limitation is that the study focuses primarily on the period from 2000 to 2020, which may limit the ability to draw comparisons with earlier periods of Nigeria’s economic history.
1.8 Definition of Terms
Economic Dependency: A situation where a nation relies on foreign economies for its economic activities, often leading to a lack of control over its resources and policies.
Underdevelopment: A state in which a country or region experiences a lack of industrialization, poor infrastructure, low income, and high poverty levels, often as a result of historical exploitation and external influences.
Foreign Direct Investment (FDI): Investment made by a foreign entity in the economy of another country, typically in the form of ownership of businesses or resources.
International Financial Institutions (IFIs): Organizations such as the International Monetary Fund (IMF) and World Bank that provide financial assistance and policy advice to developing countries.
Structural Adjustment Programs (SAPs): Economic policies imposed by international financial institutions as conditions for loans, often involving austerity measures and market liberalization.
Related Project Materials
An Evaluation of Advanced Fraud Prevention Techniques on Reducing Financial Losses in Banking: A Case Study of Fidelity Bank Nigeria
Background of the Study
Fraud remains one of the most challenging issues facing banks today, leading to significant financi...
An evaluation of interest rate stability on stimulating loan uptake in banking: a case study of Fortis Microfinance Bank
Background of the Study
Interest rate stability is a fundamental factor that influences consumer confidence and the overal...
STRATEGIES FOR INTEGRATING ENTREPRENEURSHIP INTO VOCATIONAL CURRICULA
ABSTRACT: This study examines strategies for integrating entrepreneurship into vocational curricula, aiming to equip students with essential b...
The Influence of Financial Reporting Quality on Shareholder Value: A Study of Fidelity Bank in Bauchi State
Financial reporting is a critical component of corporate governance and transparency. It provides shareholders, investors, and other stakeholders w...
Assessing the Role of Local Media in Promoting Religious Events in Bauchi Local Government Area, Bauchi State
Chapter One: Introduction
1.1 Background of the Study
Local media serves as a vital platform for promoting religious events, pa...
An Evaluation of Nurses' Adherence to Standard Precautions in Delta State Specialist Hospital
Background of the Study
Standard precautions are a set of infection control measures designed to preven...
ASSESSMENT OF THE LEVEL OF BIOTECHNOLOGY EDUCATION AMONG TERTIARY EDUCATION STUDENTS IN FEDERAL UNIVERSITY OF OTUOKE IN BAYELSA STATE
BACKGROUND OF THE STUDY
Biotechnology is one of the most important scientific revolutions of the twenty first cen...
THE INFLUENCE OF CULTURAL FACTORS ON INTERNATIONAL BUSINESS OPERATIONS
ABSTRACT: THE INFLUENCE OF CULTURAL FACTORS ON INTERNATIONAL BUSINESS OPERATIONS
The s...
EFFECT OF FINANCIAL AND NON FINANCIAL INCENTIVES ON STAFF PRODUCTIVITY
ABSTRACT
The research focused on the effect of financial and non financial incentives on staff productivity. The study...
The effect of mobile learning on students' ability to complete assignments independently in Yola North LGA, Adamawa State
Background of the Study
Mobile learning, characterized by the use of smartphones, tablets, and other mobile devices for ed...
