Globalization and Industrial Performance in Nigeria : A Case Study of the Plastic Industry; 1975-2010

This paper is an attempt to examine the impact of globalisation on industrial performance in Nigeria over the period 1975 -2010 with the plastic firm in focus. The study period was splitted into two sub-periods, the pre-SAP and post-SAP era since the formal adoption of globalization policies started with the structural adjustment programme. A descriptive method of analysis using percentages, graphs as well as econometrics approach of analysis was employed to achieve the aim of this paper. Applying the Levin, Lin and Cut as well as Hadri Z statistics to determine the stationary state of our data, the result shows that the variables are not stationery at their level but at first difference except. Therefore, a co integrating test was carried out to test the existence of a long run relationship in our data. The result suggests that there exists a long run relationship among the variables. Evidence from the study indicated that, contrary to people’s expectations and claims by the World Bank, the economic performance of industries in the Manufacturing sector especially the plastic industry during the post-SAP period were adversely affected by the process of globalization. That is these policies failed to improve the drop in the rate of capacity utilization of the plastic industry and the sector as a whole as well as their contributions to out put or the growth of the economy. The emerging results from our study indicated that prior to the SAP era the contributions of the Plastic firm to economic growth experienced a continuous drop. This situation according to our study exacerbated during the post SAP era due to the continuous fall in the rate of capacity utilization of the firm. Therefore, our findings confirm the position that the globalisation policies that aim at the structural economic transformation of the economy of the country were associated with a process of deindustrialization. On the basis of the findings from our study, we recommended that firms should be adequately informed about the next phase of globalization, protective policies should be introduced to protect infant industries and subsidization of the cost of raw materials and globalization policies should be adopted in areas where the country have comparative advantage than her trading partners