This paper aims to examine the impact of globalization in Africa by exploring the concept of globalization, how African countries view the effects of globalization, the benefits and challenges. The information used in the study has been sourced from books, magazines, newspapers and Internet research. The paper also looks to establish what globalization has contributed to African countries individually as well as a continent. The effects of globalization are both positive and negative, which have been highlighted and explored.
There has been a rise in Foreign Direct Investment in Africa from international businesses and the use of technology and IT has been on the rise. The effects from introducing new technologies and other possible improvements in organizational structure for success are also studied. 1 Globalisation is defined as integrating, operating and competing in a worldwide economy. My view of globalisation leans towards liberalism as a theory as I believe in a primarily free market. In an already predominantly capitalist world more organisations are expanding internationally, making globalised economies increasingly imminent.
Improved communication and travel methods, integrating cultures, international competitors and companies outsourcing are all driving forces behind many organisations motivation in becoming globalised. Globalisation does not only apply in a business sense but is also an issue of politics and culture, though the main focus is the integration of the world’s economies. Over the last century Africa has been an important source of commodities such as oil, minerals, precious metals and gems, with foreign companies having the majority of local subsidiaries and management positions being held by non-nationals.
Globalization in Africa Globalization has given rise to the emergence of the global corporation. This has been a natural evolution from the national to the international then multinational or transnational and now global corporation. A global corporation differs from other corporate forms in that it operates with a single global strategy with a worldwide system and plan for products, marketing, ...
In the last two decades there has been a shift towards indigenous companies becoming more dominant in certain sectors. Nationals being appointed senior positions, improved technologies, services provided to the local market through foreign investment in local entities and training of locals have all contributed to this change. This shift has also been facilitated by government policies and regulations enforced in many African nations. 2 There are advantages and disadvantages of globalization that have been debated in recent years.
The arrival of business from more economically developed countries in less developed nations such as Africa could help by accelerating their progress of development. Culture is a key consideration when it comes to globalization, as the culture of an organization is a defining feature. For a company to succeed globally I feel it is necessary for management to navigate a pathway in which it will incorporate cultural differences in order to be able to work productively.
A possible downside of globalization is that cultural identity could become diluted, confused and even lost; although most countries have embraced the changes that have been associated with globalization with policies and laws being put in place to promote the process of integration in some African countries. An example can be seen in Nigeria’s content policy, which has enforced guidelines for foreign companies operating in Nigeria. The Nigerian Content policy states – “A non-Nigerian may invest and participate in the operation of any enterprise in Nigeria.
However, a foreign company wishing to set up business operations in Nigeria should take all steps necessary to obtain local incorporation of the Nigerian branch or subsidiary as a separate entity in Nigeria for that purpose. Until so incorporated, the foreign company may not carry on business in Nigeria or exercise any of the powers of a registered company. ” Local content requirements have made foreign companies become more involved in the development of local economies. Government intervention has delivered opportunities and services for its citizens, improving quality of life for individuals and economies.
China has a lot of promises to honor after entry the WTO, such as lowering the tariff level, canceling 400 import quotas, and allowing foreign companies investing into our telecommunications, banking, insurance, and tourism sectors. The Chinese government will also relieve the red tap for both the Chinese and foreign companies to do business in China. The first challenge is the sharp competition ...
With mergers, alliances and partnerships between Nigerian and foreign companies the industry is increasingly able to utilize technology acquisition, and the development of people into creating real local value. Nigerian Content policy has allowed a clear focus to be put upon training that has provoked companies to form strategies to develop the skills of the Nigerian workforce. 3 The Nigerian oil and gas industry demonstrates that with the Nigerian Content policy and law in place attracting foreign investment locally within the Nigerian economy is effectual.
An example of this can be found in the operations of the company AOS Orwell who specialise in oil well construction, process automation, remedial services and drilling tool rental in Nigeria. AOS Orwell has strong principles concerning the surrounding local communities and environment. AOS Orwell summarize their corporate social responsibility and fundamental values in the following statement – “We are committed to conducting all business operations to the highest industrial standards and benefiting the communities where we work.
We respect the law, support human rights, protect the environment and respect cultural, national and religious diversity. ” AOS Orwell involves themselves in the local community, providing training for locals to become skilled oilfield workers. Foreign investment in the Nigerian oil and gas industry has given the country necessary means in developing. Nigeria is receptive to the effects of globalization, eager to create employment possibilities for their citizens. Enforcing the Nigerian Content policies for foreign trade is an important factor for accelerating their involvement in the global economy.
The Nigerian foreign exchange market; rate determination; control and prospects for Naira convertibility Good morning members of the high table, my colleagues in the industry and all other distinguished guests. It is my greatest pleasure to present this paper at the Foreign Exchange seminar organized by the Chartered Institute of Bankers of Nigeria. I hope I am able to shed light on this extremely ...
Other steps such as the Nigerian Content Development and Monitoring Board (NCDMB) have been taken in ensuring the Nigerian people are involved in local industries as well as building capabilities to encourage increased investment. First established in Nigeria, AOS Orwell has already expanded to Ghana and Uganda, with plans to spread to more countries throughout Africa. Uganda’s foreign trade policy focuses on building a more attractive environment for foreign investment.
Uganda’s potential for increased Foreign Direct Investment (FDI), is delayed by the lack of a skilled workforce, political interference, and the large scale of corruption. Ghana has introduced the Ghana Trade and Investment Gateway Programme policy, aiming to promote FDI and to establish Ghana as a major manufacturing, financial and commercial centre in Africa. This is a preliminary attempt in renewing their position in the evolving domestic and international trade environment. 4 Each African country has it’s own individual policies and objectives of participating in the globalized market.
Generally, the willingness to become a global competitor is positive, with strategies being developed to increase Africa’s position in the global economy. Foreign investment creating opportunities locally is an important initial step on the pathway to becoming a global contender. Training employees is a necessary foundation in the structure of an organization, in order to succeed other African countries need to learn from Nigeria’s Content Policy and consider applying similar guiding principles. 5