Emerging market: taxonomical considerations and Nigeria’s development quagmire
Vno Aghara, Nnamdi Azikiwe University, Nigeria
Aham Anyanwu, Imo State Univrsity, Nigeria
Ireneus Nwaizugbo, Chudi Okpala, and Promise Oparah, Nnamdi Azikiwe University, Nigeria
Abstract: Discourses on emerging markets have gained momentum in the literature as companies in slow-growing developed economies are intensifying their entrepreneurship and search for new growth opportunities in emerging economies. Emerging markets are countries that are restructuring their economies along market-oriented lines and offer a wealth of opportunities in trade, technology transfers and foreign direct investment (FDI). They serve as regional economic powerhouse, reminiscent of transitional societies undertaking political and economic reform, fast growing outward-oriented economies with efficient production for the domestic and export markets, political economy oriented towards entrepreneurship and free enterprise, market transparency, among others. After decades of economic turmoil, many African countries have started to make steady progress towards creating market-enabling institution. Based on a synthesis from the literature and using Nigeria as a context, this review paper argues that Nigeria has fallen short of most of the fundamental characteristics necessary to transition to an emerging economy categorization. This means that Nigeria is weakly adapted to the changed view of market-led development. Although the country is considered a regional economic powerhouse, she is only listed as a ‘Frontier country’ because of weak critical institutional characteristics, more evident in areas such as infrastructural development; privatization of state owned enterprises (SOEs); outward orientation; political and economic reforms and market transparency. The paper concludes, by arguing that for Nigeria to ascend a higher grade in the emerging market taxonomy, some important institutional refinements are necessary. These include: macro-economic reform and development to drive exports; improved infrastructure, especially power supply; serious political reforms to ensure credible political leadership; and disciplined and ethical revolution to ensure credible corporate governance in both the private and public sectors of the economy.
Keywords: Emerging markets, taxonomy, transitional societies, market transparency, frontier markets, Nigeria.