THE IMPACT OF GLOBALIZATION ON THE SOCIO-ECONOMIC DEVELOPMENT

OF AFRICA

Udochukwu Ogbaji 1and Chukwuma Ike 2

1Department of Political Science, Nwafor Orizu College of Education,

Nsugbe, Anambra State, Nigeria.

E-mail: udojoel77@yahoo.ca. Tel: +234(0) 8033486531

2Department of Public Administration, Anambra State University, Igbariam. Anambra State,

Nigeria. Tel: +234(0) 8037793993.

ABSTRACTGlobalization is a process for advancement and increase in interaction among world’s countries and people facilitated by progressive technological changes in growth, communication, political and military power, skill and knowledge as well as interfacing of culture and value system and practices. It is an interaction, a socio-political, economic and cultural permeation facilitated by Government policies, private corporations, international agencies, treaties, conventions and civil society organizations. This paper looked into the impact or effect of globalization on the social and economic factors needed for the development of Africa. From our investigation, Africa is at the lowest level of integration with the rest of the world. This implies that Africa is not likely to benefit much from the globalization process. The research shows weaknesses and sometimes mixed results regarding the impact of globalization on the socio-economic development of Africa. There is also evidence that globalization can positively affect growth in the region but such positive impact will depend on how fast Africa countries become integrated with the rest of the world and also be prepared to deal with the adverse consequence of the situation (Orji, 2007). From our review, many scholars have suggested that to be more integrated with the rest of the world, Africa countries must maintain strong and stable macro-economic framework, embark on institutional reforms including promoting good governance in all its aspects, foster trade liberalization and regional economic integration, promoting sound banking system and financial development. Africa countries will also encourage private sector development, including foreign direct investment, improve infrastructure and encourage agricultural development and investment in people capacity building on our own, we recommend, among others that Many Africa countries will also have to undertake a comprehensive reform of the civil service, aimed at improving the quality and size while enhancing its efficiency. Africa countries must also ensure efficient, reliable and cost effective public infrastructures such as transport networks, electricity, water, telecommunications, health services and education to ensure economic security.

INTRODUCTION

From its rather obscure genesis, the American and French expressions in the

1960s, globalization has became today the world’s vocabulary of the times as its

current trajectory aggressively encompasses virtually everything that takes place on

the planet in the new century world affairs which represent the contemporary

profound and rapidly remolding of the world systems into a particular social

geographic map by the use of military; economic and technological apparatuses,

eventuating gradual erosion or limiting the capacity or power of sovereign nation

states to exercise effectively political, economic and socio-cultural control over their

territorial domains (Omelle, 2006).

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For many advanced economies critical decade for globalization since world

war 11 was the 1970s, when the ratio of trade to out-put rose markedly in both

advanced and developing economies in the wake of the two oil shocks. In

developing countries, exposure to international market picked up again in the late

1980s coinciding with their movement towards trade liberalization (Slaughter and

Swagel, 1997) but Africa has not really been part of this trend.

Since the beginning of 1980s the international economic, political and social

scene has been dominated by the twin concept of globalization and liberalization.

These concepts are said to “have set in a process whereby producers and investors

increasingly behave as if the world economy consisted of a single market and

production area with regional or national sub sectors rather than a set of national

economies linked by trade and these phenomena flows” (Barikor, 1999). The tempo

of these phenomena have also accelerated significantly in recent years resulting in a

widened scope that has gone beyond the realm of the economy to encompass

social, cultural and political norms and practices.

The process of globalization has been associated with strong consequences

not only for the economic well-being, but also social structures and political

processes of countries throughout the world (Barikor, 1999). As Dharam Ghai

observed, the different parts of the world have become so interdependent in so many

ways that it is no longer possible to understand their socio-economic problems much

less do something about them, without taking into account the play of global forces.

The processes of globalization have generated fundamental changes in the role and

responsibilities of a wide range of institutions - Families, Communities, Civil Societies

Institutions, Business Corporations, States and Supranational Organizations. Africa

has not taken sufficient advantage of the process of globalization.

CONCEPTUALIZING GLOBALIZATION

Globalization as a concept resists any single or simple definition. Although

often associated with claims that the present world system is undergoing

transformation, it is an old idea (McLEAN AND McMILLAN, 2003). Nevertheless,

some definitions may still provide us a clear understanding of how the process

works. Rubens Ricupero cited in Barikor (1999) sees globalization as a process

whereby producers and investors increasingly behave as if the world economy

consisted of a single market and production area with regional or national sub sector,

rather than set of national economies linked by trade and investment flows.

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According to John Dunning “globalization refers to the multiplicity of linkages

and interconnections between the states and societies which make up the present

world system. It describes the process by which events, decision, and activities in

one part of the world come to have significant consequence for individuals and

communities in quite distant parts of the globe or which operate worldwide, the

concept therefore has a special connotation….. On the other hand, it also implies an

intensification on the levels of interaction, interconnectedness or interdependence

between states and societies, which constitute the world community. Accordingly,

alongside the stretching goes a deepening of global processes”.

In consonance with Dunning, Ajie and Ogbaji, (2009) sees globalization as “a

comprehensive term for the emergence of a global society in which economic,

political, environmental, and cultural events in one part of the world quickly come to

have significance for people in other parts of the world. Globalization is the result of

advances in communication, transportation, and information technologies. It

describes the growing economic, political, technological, and cultural linkages that

connect individuals, communities, business, and governments around the world.

Globalization also involves the growth of multi-national corporations (businesses that

have operations or investments in many countries) and transnational corporations

(businesses that see themselves functioning in a global market place).”

Globalization refers to increasing global connectivity, integration and

interdependence in the economic, social, technological, cultural, political and

ecological spheres. It is an umbrella term and is perhaps best understood as a

unitary process inclusive of many sub-processes that are increasingly binding people

and the biosphere system.

The Encyclopedia Britannica says that Globalization is the “process by which

the experience of everyday life is becoming standardized around the world” while

some scholars and observers of globalization stress convergence of patterns of

production and consumption and a resulting homogenization of culture, others stress

that globalization has the potential to take many diverse forms.

Although the popular conception of globalization equates it with the growing

integration of national economies, we have used it here to also refer to the rapid

spread worldwide of some dominant social, cultural and political norms and

practices. At the economic level, it is reflected in the heightened acceptance of free

markets and private enterprise as the major process for promoting economic

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activities. The essence of globalization at this level is captured by increasing trade in

goods and services, private capital flows in different forms, foreign investment,

technology transfer, operations of transnational enterprises, business travel and

communications, and migration and remittances. At the social level, globalization is

conceived in terms of social relations and customs (family relations, social

organization, etiquettes of social behaviour) and consumption pattern and life styles

(consumer goods and services such as consumer durables fashion and designer

articles, food and beverages) (Barikor, 1999).

Furthermore at the cultural level, it is conceived to encompass issues of

values, religion and identity. It also includes such leisure pastimes as television,

videos, music, dance nightclubs, sports and foreign travel. Finally, at the political

level, globalization is reflected in the spread of pluralist systems, multiparty

democracies, free elections, independent judiciaries, non-governmental organization

and human, women and environmental rights groups (Barikor, 1999).

In economics, globalization is the convergence of prices, product wages, rates

of interest and profits towards developed country norms on the role of human

migration, international trade, movement of capital and integration of financial

markets. The International Monetary Fund notes the growing economic

independence of countries worldwide through increasing volume and variety of

cross-border transactions, free international capital flows, more rapid and

widespread diffusion of technology. Theodore Lowi is usually credited with

globalization’s first use in an economic content. Supporters of free trade point out

that advantage suggest that comparative trade leads to a more efficient allocation of

resources, with trade benefiting in general, this leads to lower prices, more

employment, higher output and a higher standard of living in developing countries.

Libertarians and other proponents of Laissez-faire capitalism say that higher

degree of political and economic freedom in the form of democracy and capitalism in

the developed world are ends in themselves and also produce higher levels of

material wealth. They see globalization as the beneficial spread of liberty and

capitalism. Liberals see it as a tool in relieving poverty and providing the poor with a

foothold in the global economy.

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HISTORICAL PRECEDENTS

The term globalization was coined in the latter half of the twentieth century

and the term and its concepts did not permeate popular consciousness until the

latter half of the 1980s. Various social scientists have tried to demonstrate continuity

between contemporary trends of globalization and earlier periods.

Globalization is a century’s expansion of human population and the growth of

civilization that has accelerated dramatically in the past 50years. Earlier forms of

globalization existed during the Mongol Empire, when there was greater integration

along the “Silk Road”. Global integration continued through the expansion of

European trade, as in the 16th and 17th centuries, when the Portuguese, and

Spanish Empires reached to all corners of the world. The effects on European

industries were notable e.g. the silver mining in Schwas, Austria was partly gold and

silver was available from the Spanish colonies for lower prices.

The globalization becomes a business phenomena in the 17th century when

the first multinational was founded in the Netherlands. During the Golden Age, the

Dutch East India Company was established as a private owned company because of

the high risks involved with the international trade, ownership was divided with

shares. The Dutch East India Company was the First Company in the world to issue

shares, an important driver for globalization.

Liberalization in the 19th century is often called “The First Ear of

Globalization”, a period characterized by trade growth in international trade and

investment, between the European imperial powers, their colonies, and later the

United States. “The First Era of Globalization” began to break down at the beginning

of the First World War, and later collapsed during the gold standard crisis in the late

1920 and early 1930s. Lenin’s theory of imperialism (1905) provided a seminal

critique of this period as being characterized by the exploitation of he third world by

those in the first. This theme forms the basis of many recent critiques of

globalization.

Globalization in the era since World War ll has been driven by advances in

technology, which have reduced the costs, trade, trade negotiation rounds, originally

under the auspices of GATT, which led to a series of agreements to remove

restrictions on free trade. The Uruguay round (1984 to 1995) led to a treaty to create

the World Trade Organization (WTO), to mediate trade disputes and set up a uniform

platform of trading. Other bilateral trade agreements, Including sections of Europe’s

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Maastricht Treaty and the North American Free Trade Agreement (NAFTA) have

also been signed in the pursuit of the goal of reducing tariffs and barriers to trade

grand.

The World increasingly is confronted by problems that cannot be solved by

individual Nation states acting alone. Examples include cross-boundary air and water

pollution, over fishing of the oceans and other degradations of the natural

environment, regulation of outer-space, global warming, international terrorist

networks, global trade and finance and so on. Solutions to these problems

necessitate new forms of cooperation and the creation of new global institutions.

Since the end of World War 11,(WWII), following the advent of the UN and the

Bretton Woods institution in the reach and power of multinational corporation and the

rapid growth of global civil society.

MEASURING GLOBALIZATION

Looking specifically at economic globalization, it can be measured in different

ways. These centres around the four main economic flows that characterize

globalization:

1. GOODS AND SERVICES: These include import as a proportion of

national income or per capita of population.

2. LABOUR/PEOPLE: Migration rates; inwards or outward migration flows,

weighed by population.

3. CAPITAL: Inward or outward direct investment as a proportion of national

income per head of population

4. TECHNOLOGY: For example, International research and development

flows; proportion of population using particular inventions “Factor-Neutral”

technological advance such as the telephone, motor-car etc.

To what extent a Nation-State or culture is globalized in a particular year has until

most recently been measured employing simple proxies like flows of trade, migration

or foreign direct investment as described above. A multivariate approach to

measuring globalization is the recent index calculated by the Swiss think tank “KOF”.

The index measures the three main dimensions of globalization: economic, social

and political. In addition to three indices measuring these dimensions, an overall

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index of globalization and sub-indices referring to actual economic restrictions, data

on personal contact, data on information flows and on cultural proximity is calculated.

Pro-globalists believed that the first phase of globalization which was market–

oriented should be followed by a phase of building global political institutions

representing the will of world citizens. The difference from other globalists is that

they do not believe in this will, but would leave it to the free choice of those citizens

via a democratic process.

1. The percentage of people in developing countries living below US $1 “(one

dollar) per day has halved in only twenty years; with the greatest improvements

occurring rapidly reducing barrier to trade and investment, yet detailed variables

measuring poverty should be studied instead.

2. The percentage of people living on less than $2 a day has decreased greatly

in areas affected by globalization, whereas poverty rates in other areas have

remained largely stagnant. In East-Asia, including China, the percentage has

decreased by 50.1 compared to 2.2% increase in Sub-Saharan Africa.

3. Life expectancy has almost doubled in the developing world since World War

1 and is starting to close the gap between itself and the developed world where the

improvement has been smaller. Infact mortality has decreased in every developing

region of the World.

4. Income inequality for the World as a whole is diminishing

5. Democracy has increased dramatically from there; while universal suffrage is

increased to 62. 5% in all nations having it in 2000.

6. Feminism has made great advance in areas such as Bangladesh through

economically liberating and empowering women with jobs.

Supporters of globalization are highly critical of particular, current policies. In

particular, the very high subsides to and protective tariff for agriculture in the

developed world, for example almost half of the budget of the European Union goes

to agriculture subsidies, mainly to large farms and agriculture business, which form a

powerful lobby. For instance, Japan gave 47 billion dollars in 2005 in subsidies to its

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agricultural sector, nearly four times the amount it gave in total foreign aid, billion

dollars each year in subsidies to its cotton sector, including 25,000 growers three

times more in subsidies than the entire USAID budget for Africa’s 500 million people.

This drains the tax payers money and increases competition and efficiency, prevents

exports by more competition agricultural and other sectors in the developed World,

decreases competition and efficiency, prevents exports by more competitive

agricultural and other sectors in the developed world, decreases competition and

efficiency, prevents exports by more competitive agricultural and other sectors in the

developed world due to retaliatory trade barriers, and undermines the very type of

industry in which the developing countries do have comparative advantages. Tariffs

and trade barriers thereby hinder the economic development of developing

economies, adversely affecting living standards in these countries.

ANTI GLOBALIZATION: Critics of the economic aspects of globalization contend

that it is not an inexorable process, which flows naturally from the economic needs of

everyone as its proponent typically emphasized. The movement is very broad,

including church group, national liberation factors, left-wing parties,

environmentalists, and peasant unionists, antiracism groups, protectionists,

anarchists those in support of relocation and others. Some are reformist while others

are more revolutionary and others are reactionary, believing globalization destroys

national industry and jobs.

In terms of the controversial global migration issues, disputes revolve around

its causes, whether and to what extent it is voluntary, necessary or unnecessary and

its effects, whether beneficial or socially and environmentally costly. Proponents tend

to see migration simply as a process whereby white and blue collar workers may go

from one country to another to provide their services, while critics tend to emphasize

Negative causes such as economic, political and environmental insecurity and cite

as one notable effect, the link between migration and the enormous growth of urban

slums in developing colonies.

Some anti-globalization group argue that globalization is necessarily

imperialistic, and it is one of the driving reasons behind Iraqi war and is forcing

savings to flow in to the United States rather than developing nations, it can

therefore be said that “globalization” is another term for a form of Americanization, as

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it is believed by some observers that the United States could be one of the few

countries to truly profit from globalization.

THE POSITIVE IMPACT OF GLOBALIZATION IN AFRICA.

Globalization open people’s lives to other cultures and allow the flow of ideas

and values. Information and communication technologies have eased interaction

among countries and peoples. It has eased international trade and commerce,

facilitated investment and flow of capital. Globalization has freed labour across

boundaries and facilitated easy trade. It has equally set new rules that are integrating

global market out of a wide and diverse world.

THE NEGATIVE IMPACT OF GLOBALIZATION IN AFRICA.

Some cultures are being diluted and destroyed at the expense of others and

negative values are being spread all over Africa. The world is divided between the

connected, who know and who have a monopoly on almost everything and the

isolated, who do not know and who practically have nothing.

Globalization has encouraged illicit trade in drugs, terrorism, crime, rapid

spread of diseases, prostitutions, pornography, human/female smuggling, dumping

of dangerous waste and depletion of the environment by unscrupulous

entrepreneurs. (Microsoft Encarta, 2009). Globalization has facilitated “brain drain “in

developing countries thus reducing further their human capacity.

Globalization has set new global rules that have further marginalized Africa’s

poor countries and people, especially in the area of trade. It has also created a

global village of privileged people whose borders are impenetrable to the poor,

unconnected and very few. The effect of Globalization on the state in Africa is not

only of an economic nature. There are international courts, international and human

rights organizations, international military converting international laws, rules and

regulations to which the state is subjected.

The most dramatic evidence of globalization is the increase in trade and the

movement of capital (stocks, bonds, currencies, and other investments) (Ajie and

Ogbaji, 2009). From 1950 to 2001 the volume of world exports rose by 20 times. By

2001, world trade amounted to a quarter of all the goods and services produced in

the world. As for capital, in the early 1970s only $10 billion to $20 billion in national

currencies were exchanged daily. By the early part of the 21st century more than 1.5

trillion worth of Yen, Euros, Dollars, and other currencies were traded daily to

support the expanded levels of trade and investment. Large volumes of currency

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trades were also made as investors speculated on whether the value of particular

currencies might go up or down. (Ajie and Ogbaji, 2009).

Other negative impact of Globalization in Africa could be noted in the following

ways:

1 OVERSTRETCHED CAPACITY TO REGULATE AND PROTECT THE

ENVIRONMENT.

The capacity of most Africa state to handle issues such as production of

organic agricultural dumping of nucleus waste is still limited. As global

actors invest and expand their activities, especially related to industrial,

agricultural, mining, forest exploitation and fishing, the regulatory capacity

of Public Administration in African countries, which is already limited in

many respect is becoming overstretched.

2 UNDERMINING THE POWER OF THE STATE.

Some African governments are finding themselves in a situation of “fait

accompli” when it comes to making certain policies and decisions. Some

international agencies take decisions, which are binding, on countries.

This could be seen as eroding the sovereignty and power of the state.

3 UNDERMINING THE POWER OF THE STATE: Case of International Law.

There is an ongoing democratization struggle in Africa. Some African

countries began the process of democratizing their government, political

systems etc.

4. OVERSTRETCHED CAPACITY TO HANDLE INTERNATIONAL AND

COMPUTER-BASED CRIME

The African state and its forces of laws and order were used to handle

“traditional crime” white globalization there has been an increase on crime

such as drug abuse, pornography international crime like advanced fee

fraud popularly called “419” e.t.c. Progress in information technology has

facilitated emergence and growth of computer-based crimes.

5. DEBT ACCUMULATION AND THE DEBT BURDEN

The debt burden of Africa countries is well known. Most of the

accumulation of this debt over time was as much as result of incapacity of

the borrower to pay it back as it was or the ease, which the tenders gave

money to the country.

6. MAKING THE TASK OF POVERTY ERADICATION MORE DIFFICULT

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As global actors pressurize African government to open more and more to

maximize foreign investment and capital inflows and as big multinationals

and local enterprises utilize this environment to cater for their interests, the

government is having less and less room to pay attention to the object

poverty amongst its poor members or people.

CONCLUSION.

The main focus of this paper is on the impact of globalization on the socio-economic

development of Africa. From our investigation, Africa is at the lowest level of

integration with the rest of the world. This implies that Africa is not likely to benefit

much from the globalization process. The research shows weaknesses and

sometimes mixed results regarding the impact of globalization on the socio-

economic development of Africa. There is also evidence that globalization can

positively affect growth in the region but such positive impact will depend on how fast

Africa countries become integrated with the rest of the world and also be prepared to

deal with the adverse consequence of the situation (Orji, 2007). Globalization has

impacted in two fold as regards African development. It has the positive and negative

impact which sequel to this has improved in one way or the other, the social, cultural,

political interaction and existence amongst member states.

The process of globalization which entails the expansion of capital and market

forces into uncultured terrain brings along with it harsh social/economic conditions

for the populaces. In Nigeria for instance, the imposition of IMF/World Bank’s SAP

greatly undermined the living standards of the people and exacerbated the

deterioration/decay in strategic sectors of the economy.

Many scholars have suggested that to be more integrated with the rest of the

world, Africa countries must maintain strong and stable macro-economic framework,

embark on institutional reforms including promoting good governance in all its

aspects, foster trade liberalization and regional economic integration, promoting

sound banking system and financial development. Africa countries will also

encourage private sector development, including foreign direct investment, improve

infrastructure and encourage agricultural development and investment in people

capacity building. For Africa to be effective actor in the new globalization era; these

major structural changes must be put in place.

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(a) The problem of global inequality that is the 20:80 world population

spectrum-divides, where 20 represents the global hyper-rich and 80

represents the mass global poor.

(b) The global accountability/transparency question on the part of giant

transnational corporations and the supranational institutions of global

governance.

(c) The problem of a befitting strategies or mechanisms to adopt as potent movers of new social struggles for a different form of globalization capable of addressing the plights of the vast majority of the global population, which the present globalization process fails to address.

(d) Many Africa countries will also have to undertake a comprehensive reform of the civil service, aimed at improving the quality and size while enhancing its efficiency

(e) Africa countries must also ensure efficient, reliable and cost effective public infrastructures such as transport networks, electricity, water, telecommunications, health services and education to ensure economic security.

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