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Shipping Trade and its Impact on Economic Growth
Abstract
The
study investigates the impact of Ocean shipment trade on Nigeria’s economic
development, covering the period, 1976-2006. Ocean shipment trade in thousands
of tones served as the independent variable in all the three-hypothesis defined
while, the gross domestic product Nigerian value of external reserve served as
the dependent variable. The three hypotheses were actually tested for the
following conclusions to be reached:
Shipment
export trade has actually exerted a positive effect on the economy as a whole. Shipment
Export Trade exerts a significant positive effect on the level external reserve
in Nigeria. Akin to the two revelations above, the Shipmen Export Trade exerts
a significant effect on the level of Nigeria’s external debt payment,
especially for the period under investigation. The findings of this study
therefore, bring to the limelight the need for the following recommendations:
With
the perceived weak institutional setting, there is therefore the need to
improve the institutional setting in order to boost external trade contribution
to the economic as a whole. Even though Shipment Export has been found to
contribute positively to the economy generally, whether in terms of
contribution to gross domestic product, external reserve or external debt
payment, one is tempted to say that more contributions would have been recorded
with strong institutional setting.
Similarly,
the poor transparency and corruption that appear to be endemic in our country
call for concerted effort to make for an improved performance.
Chapter One
Introduction
1.1
Background
Shipping has 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 distances, it has since the ancient times been at the fore front of opening up of the world and thus a major driver in of the process of globalization. Shipping, especially container shipping has been both a cause and effect of globalization. Container shipping could lay claim to being the world’s first truly global industry. In fact container shipping could claim to be the industry which, more than any other, makes it possible for truly global economy to work, it connects countries, markets, business and people, allowing them to buy and sell on a scale not previously possible. It is now impossible to imagine world’s trade, and ultimately our lives as consumers, without container shipping. Shipping has led to a phenomenal growth in world merchandise trade, which has consistently grown faster than output. In 2006, goods loaded at ports worldwide are estimated at 7.42billion tonnes, up from 5.98 billion tonnes 2000. The value of total world export increased from US$6,454 billion in 2002 to US$40,393 billion in 2005 representing an increase of 64 per cent.
1.2
Statement Of Research Problems
The
maritime industry is international in nature and is acknowledged to be a very
dynamic component in the socio-economic configuration of any given maritime
nation. Nigeria is no exception. Even land-locked countries such as Mali and
Burkina –Faso in West Africa also hinge, their economic fortunes on the
maritime sector relying as it were on the port on Abidjan for import and export
transactions. One major problem that has continued to plague the industry in
Nigeria is the issue of adequate policy formulation and implementation, hence
the contribution of shipping trade to economic growth has therefore being a
subject of debate.
In
traditional maritime nations such as United Kingdom, U.S.A, the SSA , the
Scandinavians, Other European Countries among others, the factors of time,
power planning, co-ordination and implementation of clear-cut policies through
government intervention largely account for the enviable levels of efficiency,
sophistication and monumental success in their maritime activities especially
in respect of its contribution to economic growth. The reverse appears to be
the case in Nigeria as the fortunes of the industry have continued to suffer
progressive catastrophe over the years. A very near example is the fact that
the Nigerian National Shipping Line (NNSL) which took delivery of 19 (nineteen)
brand new tonnages from European shipyards in 1979 and 1980, has not only lost
all her vessels but has been liquidated altogether. This is complicated by the
inability of governments of different types to float an indigenous national
carrier up till date.
Therefore,
the basic questions that will agitate the mind of the researcher include the
following.
a.
What has been the trend and pattern of shipping or maritime trade in Nigeria?
b.
What are the causes of the trends in the shipping trade?
c. What has been the impact of shipping trade on economic growth in Nigeria using economic indicators of Gross Domestic Product (DPD), External Reserves and Debt Services payment as yardsticks?
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