CHAPTER ONE

GENERAL INTRODUCTION

1.1. Background to the Study

Economic globalisation has led to the increasing economic integration and interdependence of national, regional and local economies across the world through an intensification of cross-border movement of goods, services, technologies and capital. Economic globalization has been expanding since the emergence of trans-national trade, it has however grown at an increased rate over the last few decades under the framework of General Agreements on Tariffs and Trades (GATT) and World Trade Organization (WTO) which made countries gradually cut down trade barriers. While globalization has radically increased economic integration and increased access to modern ideas, it has opened up the developing economies to stiff competition for the sale of their manufactured goods in the perfect market. Nigeria which is a developing economy has been engulfed by this wave of integration and therefore faces stiff competition in her international transaction with the outside world. This is even more challenging owing to the fact that it is signatory to the WTO and as such cannot make deliberate efforts towards protecting the local industry by placing barriers on the importation of certain goods into the country.

However, every society has its peculiarities and special health demands. Pharmaceutical products are usually developed in line with the nature of an environment and the health needs of the citizenry. It is therefore imperative that countries are self- sufficient in the area of drug production. This is also essential in view of the security implications involved in the importation of drugs from other countries.

The participation of developing countries in the globalization process should be an opportunity to better utilize their comparative advantage, employ advance technologies in their production process, and attract foreign capital and management experience. On the contrary, economic globalization has expanded the gap between the developed and developing economies. One of the major arguments has always been that it is a perfect market and free trade which means each economy has the power to determine its position in the international engagements. How then has economic globalization been a hindrance or otherwise to Nigeria‘s quest for self-sufficiency in the area of pharmaceutical manufacturing?

Despite the growing number of graduates of pharmaceutical sciences in Nigeria, the country still depends on importation for seventy percent of its drug needs. Globalization has seen to the flooding of the market to the point that even drugs which are on the federal government import prohibition list are still being imported into the country.

What then are the factors responsible for this problem?

1.2. Statement of Research Problem

The world has become so interconnected and it is unequally so that the developing economies have been exposed to the influence and dominance of the developed economies. Globalisation poses a serious challenge to Oris Umoeze and Nipripharm Lab limited because it encourages stiff competition between the products of these companies and the imported products and at the same time globalization comes with a global standard such that for every pharmaceutical manufacturing company to survive in this competitive environment it must be able to adhere to its tenets. This challenge affects the different sectors of the Nigerian economy differently. Yet, most studies have focused on the effects of globalization on the domestic economy in general without attention to each of the sectors despite the rapid increase in the importation of pharmaceutical products into the country. This study therefore set out to examine the effects of globalization on the pharmaceutical industries in Nigeria with a special focus on Oris Umoeze Nigeria Ltd and Nipripharm Lab Ltd in Abuja.

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