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 1

st

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 sustainedconcerted 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 capitalcritical infrastructure and regional

competitiveness and so on.

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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

Enterpreneur-

A 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 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.

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