IMPACT OF LOCAL MANUFACTURER IN THE ECONOMIC DEVELOPMENT OF NIGERIA
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Historically, no country of the world ever experience economic growth and development by engaging in substantial agriculture that is by exporting only raw materials without having an industrial sector, and in modern terms an advanced service sector. Industrialization acts as a catalyst that accelerates the pace of structural transformation and diversification of economy, enable a country to fully utilize its factor endowment and to depend less on foreign supply of finished goods or exporting of only raw materials for its economic growth, development and sustainability. Industrialisation should be seen as a single global process, in which individual countries follow different paths depending on their initial conditions and moment of their entry into the race (Pollard, 1990). Local manufacturing is the core mover of industrialization and it plays a key role in the global economy. The emergence of modern local manufacturing had led to the dramatic changes in the structure of the world economy and to sustained increases in the growth of labour productivity and economic welfare (Maddison, 2001, &2007). Local manufacturing plays a unique role because it has strong linkages with all other sectors of the economy and is the fundamental base for the economic health and security of a nation. Interestingly, about a fifth of global income is generated directly from local manufacturing industry, and nearly half of household consumption relies on goods from industrial processes. The demand for local manufactured goods continues to rise as people around the world enter the global consumer class. The local manufacturing sector currently contributes 17 percent of the world’s US$ 70 trillion economy, and accounts for 70 percent of global trade (National Industrial Revolution Plan, 2014).Productivity is higher in the local manufacturing sector than in the agricultural sector and the transfer of resources from agriculture to local manufacturing provides a structural change bonus (Szirmai, 2009). Research shows that as economies mature, the role of local manufacturing evolves and its impact on the economy changes. Poor countries start of by employing the bulk of their population in agriculture however for these countries to transition into middle income/developed markets, they must create a robust industrial and services sector, which are the drivers of mass employment, improved skills and better wages, providing the foundation for long-run sustainable economic growth and advancement (Lewis, 1979). The development of some Asian countries as from the second half of the 20th century was anchored on a virile local manufacturing sector. China is currently the second largest economy in the world and they are also the local manufacturing factory of the whole world, which has significantly improved the standards of living of her people in the last three decades.
In the light of the foregoing, one can infer the importance of the local manufacturing sector, as it serves as prime mover or main engine of economic growth and development.
Leave a Reply
You must be logged in to post a comment.