Half of the population lives below the poverty line of $1 a day, and the country's literacy and infant mortality rates are among the lowest in the world. Although petroleum has annually accounted for more than 90 percent of export revenues and 80 percent of government revenues over the past two decades, there was a very different economic picture before the 1970s. Unfortunately, as the 1980s wore on, the country's oil revenues continued to fall. The debt situation of the country worsened, and the deteriorating economy forced greater concessions to IMF demands.
One can hope that something called the Nigerian spirit or character will lift the country from the mire of pessimism. The immediate focus of policy remains the outcome of the structural adjustment program and the question of whether it can give the economy sufficient strength to compete in the global economy. Until such issues are resolved, long-term confidence in
The globalization of markets, manufacturing and techno-industrial innovation therefore gives particular importance to the different kinds of networking. In contrast to previous forms of the international division of labor, locational participation is less denned by contributing products than by contributing to the various processes of production. These highly globalized processes are decisive for both different types and different opportunities for industrial development that can be identified at different industrial locations (Hilpert 2003). Global tendencies in industrial development are leading to a more complex form of the international division of labor. While the relocation of mature and old industries has induced regional crisis in the traditional industrial centers, now the transfer of such industrial capabilities provides the basis for advanced industries to keep costs under control and to gain competitiveness based on low production costs at locations where suppliers for these parts are based. This kind of hierarchical integration is based on different production costs and demands successful networking between locations that are on different levels of industrial development. Depending upon the competitive situation and the opportunities to gain benefits from relocating manufacturing, there is a tendency towards the integration of new industrial locations (Hilpert 2003).
Even though there is a new pattern of integration due to both international production networks and processes of globalization, this does not relate to a complete change in industrial development. The continuation of key strategic centers or of the manufacturing of key elements at established locations, competing against relocated advanced production units in new locations, is sharpening the regional expression of the international division of labor that can be understood only if the underlying processes of organizing global manufacturing are analyzed National strategies for techno-industrial innovation are inevitably picking particularly appropriate cases for success (Hilpert 2003). The pre-existing regional structure, the very specific requirements for these new technologies and new forms of industrial development, and the need for immediate realization of these processes consequently do not take into regard attempts at regional development (Hilpert 2003).
Developments in certain industrial sectors have a regional expression, and these regions also form the basis for uneven economic development. Whilst not denying the importance of public policies, regional development to a great extent follows from the geographical expression of national industrial capabilities. Even though many of the previous centers of industrial development reemerge in relation to current innovations, the regionalized division of labor changes with regard to new technologies (Hilpert 2003). Industrial development in
Nigerian Stock Exchange
The Nigerian Stock Exchange operates four trading floors in
In contrast, informal finance is not used as productive working capital or for investment by small and micro-enterprises on any significant scale, although urban moneylenders do grant loans to small business, and traders operate interlinked credit transactions among farmers. However, as in many countries of sub-Saharan
Almost without exception, contemporary economic theory extols capital markets as the financiers and controlling mechanism of the capitalist system. The financial failures of government-owned enterprises and the less developed countries are commonly attributed to the absence of capital market constraints on their profligacy. The main condition for the development of equity markets, the joint stock system of company ownership, did not become legal for industrial companies in industrialized countries until the 1860s (Toporowski 2000). Even then, the key actual function of the capital market was not the creation of a market that would allow capital to be switched between companies, but the tapping of the wealth of the old, principally landed, upper classes, in order to provide finance for the enterprises needed to establish the new capital-intensive industries of the second half of the nineteenth century. Through the capital market, those owners may more easily liquidate their interests in a company experiencing difficulties, providing there are buyers of their stock (Toporowski 2000).
If there are no buyers, then the shares are in effect suspended and the owners of such a company have to liquidate the company to retrieve their money. Thus the benefits of greater access to finance for companies that a capital market affords are offset to some degree by the weaker commitment of the owners to their enterprise. This increases the risks attendant upon capital market financing of fixed capital investment, and is the reason why rational entrepreneurs occasionally go private by buying out their less committed shareholders (Toporowski 2000). Although the issue of capital market instruments raises cash, that ash is the asset counter-part of the capital market liabilities. If the company buys other assets for that cash, the return on them must be at least as good as its payments commitments to the capital markets. There may appear to be many such opportunities in the boom, but they will almost inevitably bring reduced returns in a recession. If the proceeds of a capital market issue are retained as cash, then the credit represented by the bank deposits remains the asset counterpart of capital market liabilities. But because it is on the company's account at the bank, it is indistinguishable from internally generated funds, so that it is more likely to be used speculatively on ventures which bring little or no return, or used to service capital market obligations which cannot be rolled over' when the capital market is illiquid (Toporowski 2000).
In a recession, the demand for capital market finance tends to dry up, as firms concentrate on maintaining payments on commitments already entered into. Furthermore, the returns from fixed capital investments completed in the recession are now lower than anticipated, providing a less convincing case to the markets for subscribing to new stock that a company may try to issue. Eventually it may squeeze reserves and oblige companies to lower or even pass their dividends (Toporowski 2000). The capital market serves as added measure for governments and businesses to liquidate their interest in a certain company that has experienced various kinds of problems.
Role of capital market in industrial development
Capital market development is an intrinsic component of the overall strategy for economic development for three reasons. First, equity capital is an effective cushion against adverse circumstances. Second, equity capital markets are considered to be more efficient than bank-based debt markets. Third, inadequate provision of term finance and the lack of direct financial markets have resulted in high inflation in developing nations (Kumar 1994). The stock market influences aggregate growth in two ways. First, the stock market increases firm efficiency by eliminating the premature withdrawal of capital from firms. Second, the stock market increases the resources devoted to firms. By increasing liquidity of firm investment, reducing productivity risk, and improving firm efficiency, stock markets encourage firm investment, which in turn stimulates human capital production and growth. By providing the opportunity to risk-averse investors to diversify, they are encouraged to invest more (Kumar 1994).
The capital market provides assistance to the industrial development of
The economic performance of
Although the issue of capital market instruments raises cash, that ash is the asset counter-part of the capital market liabilities. In a recession, the demand for capital market finance tends to dry up, as firms concentrate on maintaining payments on commitments already entered into. The capital market serves as added measure for governments and businesses to liquidate their interest in a certain company that has experienced various kinds of problems. The capital market provides assistance