University of Nigeria Research Publications

UGBOR, Benedict Chikezie

Aut

hor

PG/MBA/91/10713

Title

The Impact of Deregulation on Foreign Investment & Industrialization in Nigeria

Facu

lty

Business Administration

Dep

artm

ent

Banking and Finance

Dat

e

December, 1992

Sign

atur

e

THE IMPACT OF DERECUL4TION ON FBRE3[GN

INVESTMWT AND INDUSTRIALIZATION

IN NICEXIA .

DEPARTMENT OF BANKING AND FINANCR

UNIVERSITY OF' N I G E R I A ,

ElWCU CAMPUS

THE IMPACT OF Dk23EGULATION ON M ) R S G N

INVESTHERIT AND INDUSTRIALIZATION

IN NIGERIA

ABSTRACT

A c o u n t r y e x p e r i e n c e s a good l e v e l of f o r e i g n

i n v c s t r n e r , t cind i n d u s t r i a l i z a t i o n when she h a s a g o o d p o l i c y

e n v i r o n m e n t f o r t h a t . I n N i g e r i a t o d a y , t h e c u r r e n t p o l i c y

e n v i r o n m e n t centres o n d e r e g u l a t o r y measures. ' T h i s research

thert:fore, i s u n d e r t a k e n t o assess t h e effect o f d e r e g u l a t i o n

o n foreign i n v e s t m e n t a n d i n d u s t r i a l i z a t i o n i n N i g e r i a . I I

T h i s w i l l e n a b l e u s t 'he more t o a s c e r t a i n w h e t h e r o r noC t h e

p o l i c y mc~tsure s h o u l d be r e s o r t e d t o c o n t i n u o u s l y a s a

tolerable d e v i c e f o r e c o n o m i c g r o w t h i n t h e c o u n t r y .

I n t h i s v e i n w e expect to u n d e r s t a n d better t h e o b j e c t i v e s , of d e r e g u l a t i o n in terms of foreign i n v e s t m e n t and i n d u s t r i -

a l i z a t i o n ; the measures a d o p t e d t.o i c h i e v c t h e s e o b j e c t i v e s ,

a n d the e x t e n t to w h i c h these o b j e c t i v e s h a v e b e e n rea l ised. I To ach ieve o u r aim, t h e research m e t h o d o l o g y adopted

is t h e use of t h e p r i m a r y a n d s e c o n d a r y d a t a . T h r o u q h t h e

p r i m x y m e t h o d , i n f o r m a t i o n were col lected b y o r a l i n t e r v i e w s , I

a d m i n i s t e r i n g q u e s t i o n n a i r e s and a t t c n d i n q r e l e v a n t s e m i n a r s . I

W i t h regards to t h e s e c o n d a r y m e t h o d , we c o n s u l t e d a n n u a l

reports of many o r g a n i z a t i o n s , f i n a n c i a l r e v i e w s , s t a t i s t i ca l

b u l l e t i n e s , j o u r n a l s , m a g a z i n e s a n d n u m e r o u s f o r e i g n a n d

l o c a l t e x t b o o k s bearing o n t h e t o p i c . I

I The r e s u l t of the s t u d y s h o w e d t h a t d e r e q u l a t i o n i n

t h e h a n k i n q i n d u s t r y y i e l d e d a positive effect b u t t h i s

positive effect is s e r i o u s l y b e i n g c o u n t e r e d b y t h e a d v e r s e

v i i .

p e r c c : ; , t Z ~ ~ 1 1 c ) f e c o n o m i c management or p o l i c y m e a s u r e s

( g i v u n Illgcrj. an e n v i r o n m e n t ) r a t h e r t h a n f r e q u e n t l y

jumping f'rorri one p o l i c y to a n o t h e r w h i c h sanetimes a r e

T I I L . . - . ~ : , ~ . ~ i . i : t ~ t dmong t h e m s e i v e s . uie s h o u l d bt-. mom select lve

jn our clioicc! s f f o r e i g n i n v e s t m e n t r e q u i r e m e n t . /ill

th?--e o r l d :Iclny m o r e \ d i l l restore t h e c o n f i d e n c e of f o r e i g n

i n v e s t o r s ,md to an d p p r e c i ~ b l c d=gree i n c r e a s e the l e v e l

of .;i~.:,~~,'ir! ~l i : : d t i o n i n t h o c o u n t r y .

Wflation k t e in Niet+rfa h t w e a m 9889 and 39938 b t Fsreiga Private Capital Inflew aad the Nm%sQ/OfG Dollar and Nabar/Bmaw%r Sterlimg hfr$ t a r Phs perfods 1986-i9)88. %ud~.s of W k r in Nigeria Batweun 1979 awB 9999.

Mean and bvimtiaa of h n k cr.dit Bstwc~sla 1987 - 1992+

Contiagenay Table on the General Iwrpaet a t Dcwegulatim.

I n tbr mmntvy*

cwrttribarted fa ~ n " fsrdaa82rtaMstatloa ar c grOlltth,

.it r i a l be dropfwd end a brttrar pogicj marrrrcs ssught.

If, ar, t W hwd, i t h a b m p~Ltjififwff Q O P T ~ F ~ htfng

OF la# WCg t EM*, tm f t dU bb. awp~t*

by all g a d thinking oftfmwm. Ths work wili not lm

mhawetiva fin itmlf - tt all @@sat@ s;rc rcaira

~as%ur(5bPa,& OWI t k Wpi.~.

t b governa@nt pleyed a lesdhp; rule &a Botb eastrol and I provision of fund ~ince th4 pSrat8 mwtm b o k suf t io ie~t

I

capital. i

Pmpl , I

f o r appropriate P W L ~ tr in f isaal , mmetwy*

rats p&ilsl?+a- davalogsd cmtr ie 1 liks the Norah I

I I I

dwegulatwy weasume t a their e u ~ a m i u prabt I

I

w i t n m ~ e d utlefactory nmlt in atabi l i ty and reasmabl. ~

wide aaepr* blw, wa Identify thono wear of d e + p h t i e n

An e x a h ~ g o rafe @~uIcl be defined + i * h o ~ ar the

In tbis vein, tha excrhange rate d.r.lgldirtloa i n Nigarir war

2970 mad 1972. I'hlr nut war believad not t o be mlvlng

fareign e x ~ h m g a prob1.r l a tha aomtry hence the

dawgulation of t b foraign +nehrngta. Foreign wuWmga

deregulation uar focuroed on two major areao narelyr the

detareb'tllixsatlon of the f o r r i m emhang* rrtca an8 tha methad of

aaaarr t o foreign exahmga- Both arm6 are eoaoooda td in

eaeh rtepo of. the excahpurgo clersplatlon.

f i r r t atop at foraign axohange deregulation war

th, 8eo:oad U a r Foraim kuhange Market (SFPI) of S t h

Septombar 19W t o t a t July 1987 (the firrt timr r w a i p

exahan@@ u r k a t belng an extermion of tho Ijratam o t ' rd r in i t t ra t iva ly dwarrined ax@&mgo rat. before a9th

8.ptamb.r 1806). SFlPl warn evolvod ar a rmal l r t lc rrlcet

determin8U axebaago r r ta t o reducs dmumd fo r for+igm

8xehernga t o avd lab la supply and so radma praarure on the

k l anoe of Pa-t (BOP). Tha saoand r tep a t foreign

axahango daregalation war the Foreign Excheurga h r k a t (Fa)

whirah took affec t tram 2nd 3uly 3987 and lsated till January

t98% P'EW waa a merger of the f i r a t and amand tiar marlcata.

SYSl/FlBl had two ragmmts namely: ths offf@ial/tho bidding

re6aiono whhh ulr operated by ths Caatral Bsurk a t Nigeria

(CW) end the autonamas w k e t whwe privataly rawcrad

foralgn axrzhange war trad+d. The th i rd otep a t deregula t ln~

the fweign oxehmga wao the asrglag of the autanomoor

aurrlret wit& FEP1 t o br@ase the Intar-bank Foreign Bahmge

MerklaS (IIPePI) whicrb laeted betvaen Jenwwy t989 and 4th

M a h 1992, l[FlEbl U'U8 m 8 M t t.0 StWp out the rnWgWlc@ 0f

qmltipla exehagae rates which distorts the csaonomio syatm.

Alao tha Bureau ds Change was introduoed i n August 1989 t o

among other8 ~ocord legal recugnltion to mall foreign

sxchrmge dealora, provids h.ee acadbrr to foreign mahang6 by

m u l l werr with relative eonvsnieaae and to +nhmae the

level of adeqbcy of lnfomat9sn on foreign oxchange flow

i n the eaononn;p. Only prWntely sourosd fund@ o m be traded

i n the btrramx. The fourth and latarat s t e p i n the foreign

exUhanffo dofeftulation wa& the 19192 March 3, foroign ctxchnnge 0

l ibe~~ i l&etXon, 'fhim total 1iberall;cstlon was necesmitated

by rapr aalpr~mctloabs observed under FiSl banks explaitod 1 ha

priority al lowtion of foreign oxchmge t o thm t o the

dotriagsnt o f the economy. Under the MBrch S Eloatatian, the

praetlae a i foreign exchange allooation to the banks on

preddtwminud quotas was discontinued. The aarket bsactme

purely an intwbank market in which the CBN 18 one of the

participants fro* to buy and as11 foreign exchange a t tha

rate freely deteI%tin@d by all. authorised dealerr. In thir

mmwr ths GElN fnilummelo t b exahan~r rats by open w k e t

($1) D+romalrtfon ;Ln the &nklw 3ecrtor

Traditionally, the barMae indtmtry l o the m a t rogalatr

ia my e0onmy. Thir i r beecapre of i t8 prorineat and renr i t i l

r o l e in a aauntry'm f i n m a i a l ryatem, The upate of bank

ro tp la t ion i n Wigorla rangor froa the Banking Ordinance of

1952 t o th. BaurkIn8 Act o? 1BW -dad frcm t h o t o tire.

With &peals1 refereno8 t o tho banking law8 ar fhey affoot

i n t o m a t rate, the CIM 0mtr018 fntecor t rsfer on deporitm

and Imcling a a t i v i t i e r , There war a l r o a r a a t a r r l a l lauet lon

of banking oredit$ t o givm pr~ferentlal trecatalmt t o awrtain

a c t t v i t i e r aaaordlrd pr lor&ty rtatum such as a ~ i a u 1 t t h . r and

i n d u t r y . N e v ~ t h e l a s r a8 the need f o r dr t rqplat ion wp8

bring apBa4%redl, t h w s w a r a rronr~iotm move towartla a more

laarkat-orfmted 8yrtem i n the banking fntlwtrg, Psrtiatularly

i n t987 a l l the ooatrolr on i n t e r e r t rates m e rnoved r o

tha t banks aould be f r e e to eberrg~e srarkrt r a t e r of intaroat

end prrl rrt#rpcl&itiv8 in te rea t rate. t o t h e l r dqmaitorrr.

Anothr ampacat of dw6gulatian i n the bankiug relotor wao the,

l ib@ra l i sa t ion of bank liaonrfng. Thir provided llapetur t o

f roe entry Into artd exit f r ~ m the bultimg burinem, Again t b

ab rop t i on o f the W a l Banking Sehsoo (RB18) l r a l r o m

sIommt of do ray l a t i on i n tha banking rptm. Bank8 by th i r

t~ bank8 i n t he mdluzjcolltmnt of s w t o r r l mix ae cwidan~a of

further c loreg~lr t ion la th+ banking rector. Smh f l + x i b i l i t y

a i ~ d at inareasing the dircrrution of bank8 i n their wedit

oparation i 8 w i t h raapsat t o t h e rationsrlf&ation of oradi t

d is t r ibut ion aaong seatar8 of the wanmy, betwan indigmnoua

and foreign borrower# and betwewn mall and large ac r la

borrovarr,

(iii) Ubwa l i ea t i on b r r n &ve&m

The i n ~ t i t u t i o n of the Nigalrim k t e r p r i r e a Prmotion

k t of 4972 f o r re#t ruotwing the orpership puttern qf

borinosaa8 i n tbe a o ~ t r y i n favow at Nigarildlta although

war ~l l$ lded i n 1977 t o redwe the liirt of rohedula of

rwterprirer ex~lrr8iv*lp rererved for Nigarianr wae ob@orved

t o be militating agafnrt foreign pr iva te eap i t a l inflowr

i n t o tbe omt try. Con8equently, dwegulatory Blctamrsr m r a

undertaken t o all# far a grmmter f o r r i m particripation in

dma8t ia invartmmt partiaalmrliy whorm rucrh invwtmentr e m

f o r t a r t b d m l o p t of indiganoar e x p e t i r e aaQ tha

difflurion of a w tashnaliogy. Suoh aaearwea lnaluda a l l w i n g

foreignera t o hold 80$( equity i n large rcele alprfcrultural

venturerr; 1iberrnliri;na~ o f tha raquirllrrsent for regla ter ing

new induotr ia l ea te rp r ima and g r a ~ t i n g of locational

approval by -king the l a d w t r i s l develogsaent and oo-ordimti

colarrittae (IDCC) ths o m t r a l point f o r a l l nacerawy permit8

and approval8 far Eoroi@n lnvartotmr cather than going

and dividmd repa t r i a t ion through improved and loma umborrma

pfacrrodur+; granting of rpsc ia l inaow robeto end other

uoncerriona t o entroprm(18n-r who inver t i n o ~ o n o m i ~ a l l y

d i radnntaged-arms4 and the debt aonvwrion option wanted

our fomign dsbtws. ~ t h r r m o r e , war+ the rubrequmt

(NED) 1977. One of tima0 amondmmtr i r the elloving o f b

only on. lnrtoad of the throe lirtr of rrcrheduled ~ n t e ~ p ~ l r e r

exalu8fvc)ly ~ . r e r v o d for Nlgorians. Tho other l a that

outorprfaes. FsroLgners are o q u r l l ~ welaow t o invort i n

the acshedtrled m t w p r i r o r w i th a miniarum a a p i t a l i m t i o a of

W 8 0 m i l l i o n exempt i n benkiag, lnrtrranooil h t r a lowa

prospeatr and m i n i n g burlnearer (IridwtrlaL Policy of

Nigaria 19888 a0). A l l thore ~ r r o Intended f o r an improved

focelgn -pita1 inflow inta t he uoun tv f o r an onhrmaed

fndur t r i a l expandon i n tho ooontrp

( i v ) p a d o Uberrli-

Tbe oxchange aontral act rnmttaned under foreign

exchange dorqa l a t i on above m a baekod np with asveral

t rade ro8triaticmr ranging frm Lmpeaitian of Amport Lioenrin

high Import tariffs, t o d e m d f o r advanue import depoeit

mil m t r i g h t prohibilion of aertafn import i f + l a ~ . As experte,

i n tha wonmni~ parlaace eronristsntly advocated fo r deregula-

t ion i n Nigeria, trade i ib r r s l i ea t fon waa embarked upon to

ootmtu' the adverrs ef f sa t of the above r w t r i c t t v e goliciee.

In the rain the l i b r r a l i m t f o n @xerciae involved the abo l i t io~

of 1 t end aport Licmsing and oxaha~ge ~ m t r o l on a l l

currant transaction8 and the reduction of the prohibitad

imp~rt itmn frm 74 t o 46. A ~ l l n , Nlgarfaa reaidmat8

were no .longer required t o rurronder their fareign exahmago B

ectmSne;rr t o th4 CBN oxaept that they woul& b v e t o ropat r ia te

8uoh oamirqgiato the ~ o u ~ t r y and if nelterlcu*$ keep them i n

t h e i r dmieLttary aeeooats on whish t h y aan draw traaly f o r

lnvimtasnt or ether businerr purpomS. Furthemaro, with

regard8 t o the high illpet t a r r i i r , prodwars and oonawewr

d t h the enaotmmt of the audtmr CLgd & d # o Twiff oonoolida

Doare, were provi&+d w i t h a longer t ima hbriaan fo r making th

dtmirlon. Governarent Bave equally been cult ivat ing sad

improving b i b t s r a l trade links w i t h othw oountrfaa ell i n

the Lntsretst of Inorwasin6 fnduretrtal dsvelogmmtl

ths rsheduled prMuao Prom Panrws for ra ls either i n the I

lacel a? forsign rket.. Wlth the ebVmt of deregulation ~

hawever, the board$ m e abolishad la 19fM. This abolition

croupled with thore deregulatory gPtmerrcrs; as mtioned in

( i) and (iv) above i r hoped to bring wbolt improwed p r i m

incentiver and so incream agriaultwa1 pro&rcers4 aoqwtlti%

and eon8eqtrmtly booat food production*

aapital t o a region or regions andor a paliticcral authority

biffmcent &om that ruling tbe eountry in whlah the m o i )

of capital rerideo. Fordgp lnveatnant same i n the fams

of rhort t o m trade and finnnoe crdlts; long term credits

at fixsd gnterest granted by private invemtara and invastmen

emapmier or by publac bodies lnaludin~ the govemwontt

fnvartamt In fordgn wtsrpr3ses tbrough the purabae of

chafer; the crntsblishamt or aaquZsftion of plants abroad

t o reme as foreign branabma af darnertic snterprlse or t o

functloa am an indepaadeat burineaa on foreign soil. E a ~ h

for@ of foreign Investment is determined by the duration of I

~*dltor-debtor relations; the use mad@ of tha capi ta l

received and indirectly alro the ability of the debtor t o

repay h h obligation. Other determinants are the e f fec t 1

a#' forei(ka i01mtrsat or+ ~ a t h r r rather w ar+ more rrgao8rn.d

with laytng a . p o d lawrkgm~nd t o r .a rrdtaulrcote rrrer~lrmaf

o f the effsot d a givm monmis pof iarg (d.rr)tul.fiem) on

build up oapital equipgant rlwa.~,via read#, ~ s i l w r r y r ,

faetorlea ate. without ~DBw( IPU"d8hip a8 tw might &eve

t o face i f they aolsrmmod thore t-88 &om t&Ir owtl

uaald.8 r e s o ~ w r (ChsrmWr by#&op.rbia blr;lro V, 1OSS: 791)

v o r a l p Ssw+staaaat injimtr a great dyrUldm~ into M cb6onorp

so It nreowagrrr mmprfition isr e f f i o i e n ~ y rrang lsorl

u 0 1 ~ ~ 1 n 1 e r snb tb aspatriate tisr8. In an export a~imafed

ec3oaomfr, i t g#erre++ S@mll]~a lu@bnng@ W o r e pmflt csau be

~qmwlateb ttaw ralri#qg fho Hlrll*rr&oa m f pvrmf gucobZn urd

wurtrnrt w m a c ( ~ * . ~ a p . o t . PUMP a o ~ t ~ i a ~ ~W~~UUUIIV ~ need robrt~~tfr& ?~%id;n bf~tl l t l t ap WUWO fhrW I

in4tmtrial I I

a w l a s bf aypitml i~tvertmmt) vhich thrs natian r?eae9lsd and *

that th+ way to aurPeet d t war t a inaweare +-t and Invert-

w n t abroad *%* befare that t b a war rtcrgped rim a@ a

foreign invertrsrent helps to tncraare af f la lmey end a moro

eZflcisnt elleeation of rrnouraer at a world aoala,

A l l the rrae foralgn invertmsnt 38 not all rorer. Tho

of their prodmtr In latar years In payment of iatarabt

and umortiaatian. kata rroaa form8 of fosoign dnvertwnt

Snrolra farrlgn e ~ f r o l a$ the cwfwprtma r a t up with tho

the b.n+fit&ag ~WufPy'r autmsap. Bolrr raoltimtionalm

ao will be diaeueeed i n subaeatjon 2 . 4 d below A8 the

aaaeleration of idprtrial development in the aauntry. tbm

of fbe crruaictl alamentrp in the attainment of this abJwtive

A 8 the attrauting of foreign ~apital inflow into the

Befare t h e 1ibaralia;rtion exeroi8e, many gov8raaent

i a r t i t u t i ona and progralaoasa ware urually ertablinbed with

tha intent ion ~f fac i l i t s l t ing tho inflow af more foreign

invesfment i n t o the produative 6eetcrr and an th+ othrur. band

plroteotlag the a a t i v l t i a r of the local pr iva te inve8tarr.

Thi8 warlapping jur i rd ia t ion and in6aneirtacraf.r 01 the

invartnt,sat a a t l v i t l o s i n t he country. Xn dmrt th8 invert-

noakr to the extent that proapaartiva f o r d m f n v o 8 t ~ h m r a

J, A * , i$@f),

The r t r u a t m e of for+ign gr tva ta invortmant Sn Nigwla

is d8nominatad i n gorapanant, euonomtc rec tors and region or

aountry of origin. nil, .cogponent aompr1oea of unre~t i t ted

foreign l i a b f l i t t a a . The saoamio aeatarr involve rinirqg

fo re r t ry and f i rhe r id8 ; t rmopor t and aomuniaatlonr ;

building and c?sonrtruotion; trading and bu8in+rr rervicam;

Ktngdm, Unitrd Stat. of luerica+ b t u n Wop. (wccledlag . * Unit ad Kin&m) and other unagaaitied ueuntrior . Seuraer o f

Kingdm play dumlnaat ralo i a foraign invartmnt i n Nigeria

going to be prw6aupied with a thmroitieal and rtat is t ioal

tbe prarontation and analyrlr o f data i n abspter 4.

N i g ~ i a , a daveloping country ia striving towards

indurtriel deveiopamt and we w a n t t o oee the extent t o

whish t h i r b r been ac&ieved under soonomicr policier

dmoeiaated i n Uwe~ulatary mearureo. In an effort to

sddrasaing thio matter, i t &r become exgadtent +o look

into the concept or induatrfalieation as wail a8 its

atratsgier particularly i n Nigeria. In tbie eectiou, we

ahall thmrafora define indurtrialisation and oxmine i t 8

rtruoyore and r trategieu i n Nigeria.

national eacyulopadia of aaeial rcience 1969s 232 d@fPned

Zndustrialiaation from an scanomfc paint of view ar the

syotem of grobucthn that has arisen from tha rteady

developmtnt, study and uee of ecientif ic hawledge, The

procsba o f iaduetrialia~tibn nccording t o the cbasberr

encyclopedia volume nI, 1859: 322 $8 raflactea in the

shift &way from ogrioulture vhiah tends t o occupy a

prohfrsssfvely arn~ller prapoFtian of the working population. #

Page .C;heilu, 1090:6 araw induntrialisation ar a way of

VutUQme of change in gon%sal d ~ m n d and m r a result, of

epuaial dooire t o foeter developaont. Far the pw"pQSe of

th ia work ws shal l refer t o fndustrializatfon as a way of

ieing economSc l i f e or matsrfal wolfare through

teoturioat ~Clvmose~ent attainod by Specialization and uee of driven

mcchmtoal, ohemicsal and pawar-, ,, as well 88 orgemim-

tionax and i n t e l h c t u a l aids for the purpose of reduaing

real aost of prodacing $0688 nad uervteea in porauit of a

higbr 8t;andasd of l i v ing whiah i a a symbol af ecronolaic

development

GaWrally, the aanditf on nocenwry for indur t,rlalisa-

tion include avallahlo lahaup force, aarksttu f o r finlahed

production, adeels8 t o raw l a ~ t e r i n l a (whathsr a t hmrs or

twough foreign trade) ( a eowoe of iav+itg+nt fmdr

(whether f'rom tho wealth and mvingr of tha prPvaCe rootor,

from the aceumuhtiona of the publ ic reator or f r ~ abroad)

and finally awems t o tochology. Thg OhaJrasterirtiur of

induatrialiration fneludo population growth, urbanisation,

htarnatlonal trado, growth ia Pndurtrieo en8 Snarmaring

standard of c?duoaiiol;. Thie then bring6 to mind the

quertion of how an economy can be termed indnutrialired.

Acqording t o Ilugh@e IS., W78 t 1-27 an indwtr la i i s ed

economy i a one wher~ the rbero of pa nu fa at wing i n oonulodi ty

prodwtion is above 6% having Bowevw made allowad far

the ctrmmstaaces a f individual ~ourrtrim. Sotaliffe R. B.,

1071: 251126 on the other W d aftsr reco@iising the

1imitaSiantd of guaging w&st is esrmtially a quslitattvr

ahage in eaonomfc structure 5y quantitative ar i t er ia

alone, eaw tho neaaws sf an iudnatrfalised ownomy a8 one

with the fo&lowiagt

( a ) at learnt 3096 of the total population amployad in the

- indur trial owtor.

Chsnary 9.t ~ 1 , 1986: 36Ifran1 their own point of view atatad

that R measure of nswly induatrialfaed o@untry is manufactw

hnving cited high inoome e l a e t i e i t y ; tradeable and aubstitut

goods; productivity gain& tiwough reallo~ationoof remurces

sad spoc ia l i eat ion; and a saurcs of t e 6 b k d 0 g ~ @ d change

as four cbracterirt ica of manufs~turing. According t o

t o 0% her uectora irus attained strwtural tranaf ormd%Wm

wit11 rogards t o gctting Lndwtrialiaed since, the ro c a l l e d

rbvolopad countrioa arc ai; 307.$ average. JJage, howeyer,

pointed out that Cironsry naglectod ths period ~f mmufac-

Ii:nitlstir>n t o his viow. Page asserted that a Uountry

w i t h a shor'tar history of m u f a e t u r i n g u y have somo

gical ohungs may be cunrulativr! aud tlrerefure work in

o p p ~ w direction. Thue lCllbo e t a1 i n Clronery (198Gr 190)

found between 1933 aod 2'373 a m . i U inverse reJratA~n betwaen

tire i n i t i a l share of mar~ufaciuring' i n GDY ~ I A J tire rate of

in thmtr ia l i~a t lon although the raamyle used included

oountr'lteai rencidng fndwtrla l country status vis-a-vf e

South Korea, Taiwan, Singapore and othara. In o w

explanatjotl so fer, it ie like wc ara dosaSlfng from the

tikente of diecua8ian ant? veering i n t o u d o t a i l e d and

comparative anhlysir s f manufacturing as a measure of I

ladwtrialiaatioo. As maah am t h i r might be o h r e t o befng

uerreat it f r not unintentfomL Tha a i r i r t o ju r t i fy the

ride taken by t h i r work In txwquently ratering t o nssnufsa-

tur ing ar a major Pndax of i adur t r i a l i sa t ion under o w

prsrsnta t ion and anarlyrir o f data*

2e4.2

Traditionally, i ndmt r l a l i a a t i on rtrntlrgier om bo

viewed Prom two baaie pwrpewiv r s namelyt tbr, laward-

orlentad and outward-orimntsd r t ra tegiea. An itlward- b

oriented atrategg X 8 onr i n whieh i n d u r f r i a l i naen t ivs r are

blared i n favow of productfan f o r the d m r t i a avar the

export u r k e t * I n th lo ry8f am, p w t e ~ t ion for boa. .ad@

goodo, btr.@f inport oantral an% ltuenuiag are r e l a t i ve ly

high and wtde, Althouesgh dir+ot incant ive for exporct m y

bo provided thsss l o a b i r t i ne t bias sgainrt owpart and

ertrhuage rate i r 85gnifioaatly orlrrvallued. The idaa behind

Inward oriented rtratlrgy i r t o allow a a t i a n l ~ l fimr learn

nsw product and prooesr t+ohaolog5ea rlowly wltl~out th.

frmart of internat ional aorapatifion reduoing their prof i t and

depriuring the eountry areate ahanore8 of u t i l i d n g &om1

labaur. By axtantion, the inwarddwicsatad atrat- war

8briaf %mod fapart h b r t i t u t i m Imdurt~&sf i sa t ion (IU)

rtrataw (CRrgnna Re N., 1BWN 71). Adtbu*r#afr t o thlr poliay

l i k e the inflnaatial United Hatioar &amnia Cammiraian f o r

40

Lafin Aaariaa mvimged Pour rtrgsr bar it. The i d r r t

stam aoncentratar on the grsduatian of bariu awwdurabls

uonruner good8 rueh a8 textihr, faodutaff m d p b r r ~ ~ a u t i -

uals. In the raaond ate&# aps~ialia~tion rhould be in more

oamplsx probuots known as @onsumer durable8 l i k e aookera,

radior , te levir ion and motm vehi slrsl In t h r t h i ~ d

intemadiato inUurtri+r rhould Be groasated to produae

national rupply asmponents rucb ar r t aa l , p ~ t r o u M m i ~ ~ l r ,

alcraainiua ewe Tba f i n a l rtapys rhould devolop doaw$tia

technology through aapi tnl gadr, fndurtry r@&ponsible fo r b

man\afarrtwing acaobinrry and plantr . The outward-ori.atr& r t ra tsgy also earled t h e sxport

orientad indorltrlsalisstion i r p m a i n whiah inUu8trial

polioislr do aot Biswimlmte betwsen preduction tor the

dossrtic w k e t end @-art nor batwwn p u r 0 b ~ 8 1 f o r 4am.@t&a

gocrdr and foreign g ~ o b TZH ~ i m o f tMrr rtrafegy ie t o give

t o prttiaigcurrtr i n a given aaonomy a rsaoonable degree

of f r s s d o a i n v i m o f attaining international rrtandard i n

the i r apurat ion#. hdw tho outward-orisat ed strategy,

direct oontrol and vXgoroue lioenring ar"rauig.Pontr ara

e i ther non-exirtmt o r v e ~ y low i n the @ens@ fbsf my

dtsfnoeutive t o export re rn l t i ag from import barzItarr are

more or bear aourrter-balanuad by export inooativos,

4 1

W e , a market exchullara rats irr morintalLaed 80 that thr

effsotfve exabngs Patar for iaportablrb and exportabler

ars ~oughlg equal..

I n Nfgsria, t he major i n d u r t r i a l i e e t i s n rtratsgy r lnca

1960 and probably wti l 1985 &ad been the import oubrtl tuflon

strategy, By it the uotntry intended t o ei iminate over-

dependence 0.n forafgn oanrmr goodo m d evsntually beqsm

aelf r s l i a n t , L t i n be1iav.d tbat t h i r r t r a t r g y led t o t h a

cmargsnce of protaated mtwprirrr ( ineluding avo-indurtrisr

which ware based on su tu ra l tacrtor 4mUowmsntr) with t h e re8ul

that their produatr m e not anly poor i n qua l i ty bdt 9160

very srpmnsive when soaparea t o t he i r irport@d/f~r~lgn

counterparts. T W O wao than a dr ive towotrdr an outward

or e ~ p o r t d r i a n t ~ d indu8tria1izdtian btrat.(lty Be i r being

pursued aadar the darepltrlation wcersiea. I n t h i s ragwd*

an tadtartrial pollay Ma been designed by the Plinfi$ry of

Iadurtries. Thr pollay is a regulatory do@wont or rather

a lagfirlative guide t o Invertore with rcaspsot t o indugt r ia l

davelopmmt etratagian and inaentives. Its prime objmt ive

i e t s necelerata thq p&@s of inbuatrial develaptnent by

iml~>rovSng tho investment alimatr In Nigerian Eaonomy. With

such an irnpravment it i r hoped t h a t tha indurtrinl a m t o r

w i l l be ~lctivnted lesding t o graater ~~nglaqtr~ent oppor tml t i ea

increfiaed expar t of manufatatwed gowii, 8hpersal of I

industrias, improved teahf~ologicak kills and oclpabilitiesd,

Snweassd lwal content of iadu8trfal output, high fareijjp I

capital inflow arnd inarrmarrd private reator gactleipan$r

In the mmnfaafuring wetor. So far t h aebievnentr

Central Bdnk of' N

mlonadiu of Sooial hienee Val. 6 edited by ghrin P. A. ' Wlt~ta ta~ 1931.

the Varf@tg af app~uatkm to

n m w @ h t %a& 8ttleatAffa a e s t W ir r b am+

adepWd lrts tLfr n w & . Xa alltZ

sthm Eaotbsr we t 4 ~ ) k i n t a c m ~ i d u f a k i ~ n the C O ~ C @ M X & M ~ I

I

ESw

ea~plc Par a gfven univw8e ir I

Z w hypalkbm~i+ Itv n#rr a

s.6.rrd &ID tbe epee$ 8 to ensure that they are amenable to statistical tools. I

This design include the deliberate repetition of one

cperstisss iLa Wth iamsrr sf tM ~ ~ Q z Y ~ s I I . . ~ ~ , iJ[t &am

Zajp.tgr ~SWH*. -2- ISIC4mC. t o far*%#@&

wlirlrr lgr8tn. Ira 4M+ r*wQ

from 1986

2b firs pkmq ths imrweaae is %& sf'

amam mt bo at +W&6ffy a. s t

t s i a

aft* tbu Qwss5maSisar ef

1 *B rtmmslry t b paaitivg aPPwt a2 q

dwr-btf on in Wdssrfan econmy, MagekoQurreaS Felix

raferrd So the rigmtfte

Wore 6 t h ~ ~ o t h w t aSrae darqp.la%ian,

d a m @%a. tabs. Itb+ 849 wU1 lp-v*

V&th tim gvf- as f ~ p , f t $8 16t4@1%bl+ fa

a* tar pofat ehst tka @tq$lwof riner,

-1 ~ & J w ~ M o @ wry QT aSaah%in 444 Ipr,

w+wt~a - o e r 4 m ( X e -0.74807 1.15358

-3L19495 C U.tPa44

Tu get tbe be, bi and b2 m . a t t i p l y the inveru

% l s ~ ~ l r . o ~ i p 8 t a t o f the ~QUJP f.h0 r rrjtt l

by m*?e*

Bath

Q h t

st;Qm) t h e * $48 acr

tu play & b f tBIa

Th8 test 8tntiaatia~ ts; t -

QIOl#rsu(tJiw M Lotcr tbf

in-

&ypatharlr XI. But thia paraitivcs sffeat 18 d e m i l d by the

adverrr laplioation of the Sor+ign rxehange doreylation

*id& r+ralt+d mainly in the, devaluation of the Nigerian

crwrenlrry. Thir i r why dergPt@ all the huge amount of

loan givsn @at by bmLr lor grodnotfon as $horn in Table 4(d:

erasot allow fhom apprruieto tho importear+ af &rqpletion

dear not amitor tho autivitior tbf approved fnvo8torr by

t h e m 8uoh Ohat raw dhpaaier have auaaorsfully obtained

approval withomt an anthontto addreem or carrying oat thoam

btlslnerros fa^ whi~h they were lfaenrod, Again tho b r e h 8,

1992 f loatst ion of the f6reign exchamgo ha. not div@lt.d the

foroign oxahksago traneaation of i a r high u ~ r t ebat 18 I

vantian at gavamrrsnt i n t ~ P P W w41l erala help i a &&u&atkjas

tho prlmr of tho f orotgn cb%sbmbga .I mat gonpcanfar 4 1 5

8~rqplatory moaawes planned are yet t o irs executed. For

inatmoo the aapital mrkot dwegulation and full trade

4, Sine. dtirqpalation, there 16 l o r a of aoniidenoo i n tho

oountr~r smwlcnocrr cclpttal f1Sght. ThSr f s rubrtaatfatcad B

by the r w u l t s iram the W e t of bypstherir Z. The trend i n

grrrtrr psitaor sffsot tima megrtivr affmt, i t abgglf

be mmrslidated while tsrrign owahaags dsrqgulatim *ah

dareala t h e gains of th8 B n k i a g saetw dwsgtalation be

abor$8h%do %0 foreign ex&amgs dmqpilatisn ie causing

asre harm to Mgarian saoDomy than gtwd. Thr b n t ~ a f . I

rr)rreashie @out and quality o t w cs~ntrier utl l kook for

ew gmQ8 and by aa w ohall b v e enma$h b-4 t o I I

indswfriakise the m a . NigerPanr w f l f not b+ rsrema I

gsnt. %qwl te tba fall ha o i l re I

thta w l t y .I ' 8 , Hfguia'a beps for %adatrtrializtafrisa

80 tM% thd

gmrie~ls-wt wSl1 be t o n rsamnable uxWat r e l i w r d of ifr

mawatboa cmtrol ast l rs~ @ad s lot of

aflsvscd t o tit& fnterpley at' mrkat S ~ C B . . Tk~tla %be

the ~ O P D ~ S . ~ is in~apacitated mbou1d not Be meauragod t o I

a l b r a i t h J * ) , bivara i ty , Pro..

I

I

Kotler Philip, , Prutic.-Hall I.@. W K

M i l l Stuart John, Umivwei t ifonia, 194& 5

*- b

Mllb+r C. and Runpm~ A. J . , n l'b?r&Xlm b8aderfe

Qwiatop&w WIG h e (the mitiah R l @ ~U&ULIWSP fo M i g ~ S a ) i n mn irrtrr~viw with A&#bs&llm mmk et a& on Hew #ig+srie ahauld attract bscrip iweotorr ptrblirrbed fn hm&y hardlam 23r6 Awg8a.t 1992, ppo 2 B 3.

h i o r , J o C,, (Olfios~ CBll bad O f t i - or) i n a p e r m irtuview at the Cllrtrai 8 ~ k l'Anrrbu 8mra +or en W r d Nm. 1992.

"X n mi MU rtm1.rat in the b~at.traent of b a k i n g aad .piname, Usrlv.s*sity o t iQi-fa Carpus. In parttc l folfllmmt of the regah-amt jar the . v u d of tha Ibatrm of Buriasim Adaiallrfrrtitm is bmkbng an8 Ptnasrce, 1 r *fatag a pmjmt titled the Zepaat of hrogwlatim etr 1Perafgn Iava&mant +md Xsduatrialirrtian am Mlqaria.

6 . W h s t are t h e n-ber o f a- fareign oaapanira fbbaf b.r. ~ e & ~ t e m d In NIgerla riaate bv@gwlatiml

9, Pleare give ue any otbar %nfsra&tion you derr arowmwy for tho a d e q ~ t s onmplsrtian of t h i r work.

2, Da y'ou thhk that Q%regulatton r o far ha# had on effect w lwei@ fnvsatmnt and iadumtridimtion in d g e ~ i a ? I.. w N o /7

4, On tket aver s whet tr t h e poof t i an of Nigwlan %oaomy partftrulnrly the ia$aimtriaX atsetor slaae d*r+gulationt (8) detariosalfng (b) Stagnant

/7 t7

(a) ImpravIn~ at a better rat* 0

6. Yhould the eatire deregulatuq r Pmt d!z7 8 dereguletoPy trrerelse bs .wag w contis\teb

t a t i

8. Please give m g atbr aecarruy ilaPorrolt&oar you tUnk t be neceoaary for the mcaeaoful %ompletigo

of tMlr vaster