THE IMPORTANCE OF SHIPPING TO THE ECONOMIC DEVELOPMENT OF NIGERIA

THE IMPORTANCE OF SHIPPING TO THE ECONOMIC DEVELOPMENT OF NIGERIA

ABSTRACT

The study examines the impact of ocean shipment trade on Nigeria’s economic development from 1976 to 2006. The independent variable in all three hypotheses was ocean shipment trade in thousands of tons, while the dependent variable was the gross domestic product Nigerian value of external reserve.

The following conclusions were reached after testing the three hypotheses:

1) The shipment export trade has actually benefited the economy as a whole.

2) Shipment Export Trade has a significant positive impact on Nigeria’s external reserve level.

3) As with the previous two revelations, the Shipmen Export Trade has a significant impact on the level of Nigeria’s external debt payment, particularly during the period under consideration, 1976-2006.

As a result, the findings of this study highlight the need for the following recommendations:

Because of the perceived weak institutional setting, there is a need to improve the institutional setting in order to boost external trade contribution to the overall economy. Even though Shipment Export has been found to contribute positively to the economy in general, whether in terms of contribution to GDP, external reserve, or external debt payment, one is tempted to argue that more contributions would have been recorded if institutions were strong.

Similarly, our country’s poor transparency and corruption appear to be endemic, necessitating a concerted effort to improve performance.

CHAPITRE ONE

INTRODUCTION

1.1 OVERVIEW

Shipping has been around for a long time. been recognized as one of the strong catalysts for socio-economic development. Back in 1776, Adams Smith noted that “A business working in a country town without links to the outside world can never achieve high levels of efficiency because its small market will limit the degree of specialization”. Because of distances, it has been at the forefront of world opening since ancient times, and thus a major driver in the globalization process. Globalization has been both a cause and an effect of shipping, particularly container shipping. Container shipping may be considered the world’s first truly global industry. In fact, container shipping could claim to be the industry that, more than any other, enables truly global commerce.

To enable the economy to function, it connects countries, markets, businesses, and people, allowing them to buy and sell on a previously unimaginable scale. Without container shipping, it is now impossible to imagine the world’s trade, and ultimately our lives as consumers. Shipping has resulted in phenomenal growth in global merchandise trade, which has consistently outpaced output growth. Goods loaded at ports worldwide were estimated to be 7.42 billion tonnes in 2006, up from 5.98 billion tonnes in 2000. The total value of global exports increased by 64% between 2002 and 2005, from US$6,454 billion to US$40,393 billion.

1.2 RESEARCH PROBLEM STATEMENT

The maritime industry is international in nature, and it is recognized as a very dynamic component in the socioeconomic configuration of the world.

any particular maritime nation. Nigeria is no different. Even landlocked countries in West Africa, such as Mali and Burkina Faso, rely on the maritime sector for their economic fortunes, relying on the port of Abidjan for import and export transactions. One major issue that has persisted in the industry in Nigeria is the lack of adequate policy formulation and implementation, so the contribution of shipping trade to economic growth has become a point of contention.

Traditional maritime nations such as the United Kingdom, the United States of America, the South African Republic, the Scandinavians, and other European countries, among others, owe their enviable levels of efficiency, sophistication, and monumentality to factors such as time, power planning, cohesion, and the implementation of clear-cut policies through government intervention.

success in their maritime activities, particularly in terms of economic growth. The opposite appears to be true in Nigeria, where the industry’s fortunes have continued to deteriorate over time. The Nigerian National Shipping Line (NNSL), which received 19 (nineteen) brand new tonnages from European shipyards in 1979 and 1980, has not only lost all of her vessels but has been liquidated entirely. This is complicated by the inability of various governments to launch an indigenous national carrier to date.

As a result, the following are some of the fundamental questions that will preoccupy the researcher’s mind.

a. What has been the shipping trend and pattern?

or Nigerian maritime trade?

b. What are the causes of the shipping trade’s trends?

c. How has the impact of shipping trade on economic growth in Nigeria been measured using economic indicators such as gross Domestic Product (DPD), External Reserves, and Debt Service Payment?

1.3 THE STUDY’S OBJECTIVE

The primary goal of this research is to determine empirically the impact of ocean shipping export trade on Nigeria’s economic development. The following are the specific goals of the study:

1. To ascertain the relationship between ocean shipping export trade and Nigeria’s GDP.

2. Determine the impact of ocean shipping export trade on Nigeria’s foreign reserves.

3. To ascertain whether ocean shipping export trade has a significant impact on the level of external debts.

payment.

4. To identify policy barriers to the effective use of ocean shipping export trade to boost the economy and make policy recommendations.

1.4 QUESTIONS FOR RESEARCH

Given the aforementioned objectives, we consider the following research question for the study?

1. What is the nature of Nigeria’s economic development in relation to ocean shipping export trade?

2. To what extent has the ocean shipping export trade influenced the level of Nigeria’s GDP?

3. What effect does ocean shipping export trade have on Nigeria’s foreign exchange reserve?

4. To what extent has Nigeria’s debt service payment been influenced by ocean shipping export trade?

5. What are the policy constraints in Nigeria that prevent the effective use of ocean shipping export trade?

1.5 THEORIES OF RESEARCH

In order to

We will conduct adequate research and analyze the relationship of the required variables by developing the following hypotheses: H0:1 Three, there is no significant relationship between ocean shipping export trade and GDP.

H0:2: There is no link between ocean shipping export trade and external reserves.

H03: There is no statistically significant relationship between ocean shipping export trade and payment of external debts.

1.6 STUDY SIGNIFICANCE/JUSTIFICATION

There is no denying that the issue of economic growth and development is one of Nigeria’s most sensitive issues today. The scenario of abject poverty in a land of surplus, as in Nigeria, is one reason for the sensitivity of this issue. The explanation for

This boils down to the fact that every reasonable level of underdevelopment in Nigeria. Because of the current level of poverty and penury, the unborn generation is even saddled and sold into economic slavery.

A study of such a sensitive subject as the relationship between economic development, external reserves, debt payment, and ocean shipping export trade in Nigeria is therefore required at this time. The need to provide a long-term solution to the problem of underdevelopment, abject poverty, tribal clashes, Niger Delta Youth economic growth scenario, and management of our abundant natural resources is thus a task that must be completed, and thus justifies this research work. As a result, this study is significant.

1.7 STUDY SCOPE

The scope of this study is as follows:

an overview of the nature of the relationship between the ocean shipping export trade and economic development in Nigeria, giving special attention to the some indicators of economic growth in Nigeria – gross domestic product, external reserve and external debt payment. Other countries that are relevant to this research would be mentioned. The study also spans 31 years, from 1976 to 2006.

1.8 STUDY LIMITATIONS

The purpose of this research was to conduct an overview analysis of Nigeria’s ocean shipping export trade in relation to its economic development and growth. It would evaluate the concept of ocean shipping export trade in relation to current economic growth, with special emphasis on the relationship between ocean shipping export trade and some other factors. Economic growth indicators. However, due to time constraints, a lack of good data bases and information sources in Nigeria, and, worst of all, a lack of research work, it was not possible to cover all of the country’s economic growth information.