THE IMPORTANCE OF SHIPPING TO THE ECONOMIC DEVELOPMENT OF NIGERIA 1976-2006.

THE IMPORTANCE OF SHIPPING TO THE ECONOMIC DEVELOPMENT OF NIGERIA
1976-2006

ABSTRACT
The study investigates the impact of Ocean shipment trade on Nigeria’s economic development, covering the period, 1976-2006. Ocean shipment trade in thousands of tones served as the independent variable in all the three hypothesis defined while, the gross domestic product Nigerian value of external reserve served as the dependent variable.
The three hypotheses were actually tested for the following conclusions to be reached:
1) Shipment export trade has actually exerted a positive effect on the economy as a whole.
2) Shipment Export Trade exerts a significant positive effect on the level external reserve in Nigeria.
3) Akin to the two revelations above, the Shipmen Export Trade exerts a significant effect on the level of Nigeria’s external debt payment, especially for the period under investigation, 1976-2006.
The findings of this study therefore, bring to the limelight the need for the following recommendations:
With the perceived weak institutional setting, there is therefore the need to improve the institutional setting in order to boost external trade contribution to the economic as a whole. Even though Shipment Export has been found to contribute positively to the economy generally, whether in terms of contribution to gross domestic product, external reserve or external debt payment, one is tempted to say that more contributions would have been recorded with strong institutional setting.
Similarly, the poor transparency and corruption that appear to be endemic in our country call for concerted effort to make for an improved performance.

CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND
Shipping has for a long time been recognized as one of the strong catalysts for socio-economic development. Back in 1776, Adams Smith noted that ’’A business working in a country town without links to the outside world can never achieve high levels of efficiency because its small market will limit the degree of specialization”. Because distances, it has since the ancient times been at the fore front of opening up of the world and thus a major driver in of the process of globalization. Shipping, especially container shipping has been both a cause and effect of globalization. Container shipping could lay claim to being the world’s first truly global industry. In fact container shipping could claim to be the industry which, more than any other, makes it possible for truly global economy to work, it connects countries, markets, business and people, allowing them to buy and sell on a scale not previously possible. It is now impossible to imagine world’s trade, and ultimately our lives as consumers, without container shipping. Shipping has led to a phenomenal growth in world merchandise trade, which has consistently grown faster than output. In 2006, goods loaded at ports worldwide are estimated at 7.42billion tonnes, up from 5.98 billion tonnes 2000. The value of total world export increased from US$6,454 billion in 2002 to US$40,393 billion in 2005 representing an increase of 64 per cent.

1.2`STATEMENT OF RESEARCH PROBLEMS
The maritime industry is international in nature and is acknowledged to be a very dynamic component in the socio-economic configuration of any given maritime nation. Nigeria is no exception. Even land-locked countries such as Mali and Burkina –Faso in West Africa also hinge, their economic fortunes on the maritime sector relying as it were on the port on Abidjan for import and export transactions. One major problem that has continued to plague the industry in Nigeria is the issue of adequate policy formulation and implementation, hence the contribution of shipping trade to economic growth has therefore being a subject of debate.
In traditional maritime nations such as United Kingdom, U.S.A, the SSA , the Scandinavians, Other European Countries among others, the factors of time, power planning, co-ordination and implementation of clear-cut policies through government intervention largely account for the enviable levels of efficiency, sophistication and monumental success in their maritime activities especially in respect of its contribution to economic growth. The reverse appears to be the case in Nigeria as the fortunes of the industry have continued to suffer progressive catastrophe over the years. A very near example is the fact that the Nigerian National Shipping Line (NNSL) which took delivery of 19 (nineteen) brand new tonnages from European shipyards in 1979 and 1980, has not only lost all her vessels but has been liquidated altogether. This is complicated by the inability of governments of different types to float an indigenous national carrier up till date.
Therefore, the basic questions that will agitate the mind of the researcher include the following.
a. What has been the trend and pattern of shipping or maritime trade in Nigeria?
b. What are the causes of the trends in the shipping trade?
c. What has been the impact of shipping trade on economic growth in Nigeria using economic indicators of Gross Domestic Product (DPD), External Reserves and Debt Services payment as yardsticks?

1.3 OBJECTIVE OF THE STUDY
The central objective of this study is to empirically determine the impact of ocean shipping export trade on Nigeria’s economic development. Specifically, the study intends to accomplish the following:
1. To determine the relationship between ocean shipping export trade and Nigeria’s gross domestic product.
2. To ascertain the influence of ocean shipping export trade on Nigeria’s external reserve.
3. To determine whether ocean shipping export trade significantly influences the level of external debts payment.
4. To isolate policy constraints towards the effective use of ocean shipping export trade to boost economy and proffer policy recommendation.

1.4 RESEARCH QUESTIONS
Having stated the above objectives, we therefore, consider the following research question for the study?
1. What is the nature of relationship between ocean shipping export trade and Nigeria’s economic development?
2. To what extent has ocean shipping export trade influenced the level of Nigeria’s gross domestic product?
3. What is the influence of ocean shipping export trade on Nigeria’s foreign exchange reserve?
4. To what extent has ocean shipping export trade influenced Nigeria’s debt service payment?
5. What are the policy constraints toward the effective use of ocean shipping export trade receive in Nigeria?

1.5 RESEARCH HYPOTHESES
In order to carry out an adequate research work, and to analyze the relationship of the needed variables, we shall make the following hypotheses: H0:1 Three is no significant relationship between ocean shipping export trade and the Gross Domestic product.
H0:2: There is no significant relationship between ocean shipping export trade and external reserve.
H03: There is no significant relationship between ocean shipping export trade and external debts payment.
1.6 SIGNIFICANCE/JUSTIFICATION OF THE STUDY
There is no gain saying the fact that the issue of economic growth and development is one of the most sensitive issues in Nigeria of today. One reason for the sensitivity of this issue is the scenario of abject poverty in the land of surplus as in the case in Nigeria. The reason for this boils down to the fact that every reasonable Nigerian level of underdevelopment. The generation yet unborn is even saddled and sold to economic slavery because of the present level of poverty and penury.
A research work on such a sensitive matter as the relationship between economic development, external reserve, debt payment and ocean shipping export trade in Nigeria, is therefore at this time a necessity. The need to provide a lasting solution to the problem of underdevelopment, abject poverty, tribal clashes, Niger Delta Youth economic growth scenario, management of our abundant natural work is therefore a task that must be done and hence a justification for this research work. Hence, this study is significant.
1.7 SCOPE OF STUDY
This research work aims at covering an overview of the nature of the relationship between the ocean shipping export trade and economic development in Nigeria, giving special attention to the some indicators of economic growth in Nigeria – gross domestic product, external reserve and external debt payment. References would be made to other countries which are relevant to this research work. The study also covers a period of 31 years, 1976-2006.
1.8 LIMITATION OF STUDY
the research work has been intended to have an overview analysis of the Nigerian ocean shipping export trade in relation to it economic development and growth. It would assess the concept of ocean shipping export trade in relation to the current level of economic growth given special attention to relationship between ocean shipping export trade and some indicators of economic growth. However, due to time constraints and lack of good data base and information sources in Nigeria and worst still because of lack of the research work could not cover all the economic growth information of the country.

CHAPTER TWO
LITERATURE REVIEW
2.0 THE GLOBAL EVOLUTION OF CONTAINERIZATION
According to Kummi (2007), before the advent of containerization, most general cargo was shipped in loose form. This each item had to be packed and stowed into the Ocean Liner. This was a highly labour-intensive activity that was slow, expensive and difficult to execute. It also exposed cargo to the risk of damage or pilferage. As a result, ships spend two thirds trading life in ports and cargo handling costs had escalated to more than one –thirds of the total costs of the ships-owner. Liner shipping was headed for bankruptcy and the need to find an urgent solution became imperatives. The introduction of containerization mid – 1970’s changed everything, and launched liner shipping into a revolution that continues to shape the industry.
2.2.1 SHIPPING TRADE IN NIGERIA
Commentaries have over the years been given about shipping trade in Nigeria. Most of these works are focused on selected and diverse aspect of maritime practice in as it affect the growth. We have such central theme relating to the roles of the National Maritime Authority (now NIMASA) and the effectiveness of shipping policy decree 10 of 1987, the function of the Nigerian Ports Authority; problems and prospect of the shipping industry in Nigeria among others. No previous work has actually gone extra mile of attempting to bridge the yawning gap among the maritime regulatory agencies in Nigeria such as the Nigerian Ports Authority (NPA), Nigerian Shippers’ Council, Niger dock and the Nigerian Maritime Administrative and Safety Agency (NIMASA) among others to the effect of making them a functional. Whole capable of evaluating shipping trade in Nigeria to international standards. Nigeria possesses the geo-political and demographic potentials of a major maritime power yet the industry continue to suffer degradation.
Iheanacho (1997) enunciated some strategies towards the development of the shipping industries in Nigeria. His main focus was on the shortcoming of the Decree 10 of 1987 which vested policy implementation on the National Maritime Authority (NMA now NIMASA). In his view, the shipping policy is rather too deficient in scope and coverage to make any meaningful impact on maritime transport and trade in Nigeria. He sees it as not protective enough of indigenous interest especially in the area of cabotage and government assistance to indigenous operators through subsidies for the acquisition of new tonnage or ships. Aluko (1995) focused her discourse on the development of Nigeria’s shipping industry in the context of vision 2010, an agenda constituted by Nigeria’s Late Head of State General Sani Abacha to chart a new socio-political and economic direction for Nigeria in the 21st century. Ja’afaru (2001) in examining the future’ of Nigeria maritime industry observed among other things that Nigeria requires a well articulated maritime law and policy constructed to encourage and foster economic growth and development. Oyedeji (2004) in his write-up is also of the opinion that for a greater impact or relevance in the maritime sector to be achieved the nation must embark on a more elaborate shipping policy which should encompass the development of maritime capacity building in line with the trends of the world’s maritime growth taken into consideration the relevance of the shipping globalization.

2.2.2 IMPORTANCE OF SHIPPING TRADE IN NIGERIAS ECONOMY
Balarabe (2004) believed that perhaps unlike any other country, the maritime industry on a global level provides a horde of opportunities for investment. First and foremost it has served to stimulate import and export trade by way of providing surface transport through which goods are moved by sea on a massive scale. Indeed, since the arrival of Johnl d’ Averino, the Portuguese explorer at the Benin River in 1485, trading contact by sea had been established between the Europeans and the West Africans sub region and Nigeria in particular. The obnoxious trade in Africa, the slave trade would have been impossible on the scale it was carried out but for the usage of the sea routes by ship. Shipping trade also made it possible for the Colonialists to establish a firm hold on settler economies such as the South Africa where in 1627 the Dutch explorer Jan Van Riebek and his successors ensured that the natives continue to serve as cheap labor in mines and plantations. Nevertheless maritime (shipping) trade has played a major role in Nigerian economic development. It account for instance for about 95% of the vehicular mean’s of Nigeria’s international trade. Besides, it has also acted as a cardinal force in Nigeria’s attempt to correct her trade imbalances with the industrialized nations of the world. Indeed since becoming a signatory to the UNCTAD code for liner conference in 1975, a number of bilateral and multilateral maritime agreements have been entered into by the Nigerian Government and this to a large extent has aided the sector in the movement of cargo in and out of the Nigerian shores. According to Olokoba (2006), maritime business has helped the process of diversification of Nigeria’s economy and has continued to provide employment opportunities to Nigerians as crew staff, mariners and dock workers in addition to various practitioners among which are freight forwarders. In fact for as long as it existed, the Nigerian National Shipping Line (NNSL) not only provides employment to Nigerians but also serve as a pool or training ground for majority of the master mariners and other experienced professional people in Nigeria’s maritime sector up till today. The need for adequate training and re-training of personnel for the industry also culminated in the establishment of the Maritime Academy of Nigeria (MAN) at Oron. It has also led to the training of seafarers outside the country by states government in Nigeria. Maritime transport also generates the much needed foreign exchange to the Nigerian economy. This is in the form of ship repairs, levies, taxes and port fees and charges among others. The Nigerdock for example though has not been known to have built an Ocean-going vessel, but has been meaningfully engaged in the repairs and maintenance of ships and the construction of ferry boats all of which constitute an integral part of maritime transport. Besides it is the official policy of the Nigeria Administrative and Safety Agency to collect a levy on the gross freight from any vessel that calls at the Nigerian Ports for export and import purposes.
The rational behind this is to boast Nigerian merchant shipping fleet for the sake of effective lifting of her share of cargo. Whether this purpose was ever achieved through the disbursement of the Ship Acquisition and Ship Building Fund (SASBF) is another matter entirely. Since 1958 when oil was discovered in commercial quantity at Oloibiri, Nigeria’s Oil Terminals such as in Bonny, Escravos and Forcados have continues to play host to oil tankers of various profiled and sizes, crude oil has since displaced agriculture as Nigeria’s economic mainstay accounting as it were, for about 85% of Nigeria’s total export. Eventhough crude oil export has served to boost Nigeria’s external reserves and buoyed the economy, the total exclusion of Nigeria’s indigenous carriers from the lucrative trade has been a subject of heated debate between the maritime practitioners and the federal government. Igbecha in a study (2004) revealed that Nigeria loses about $800,000.00 (Eight Hundred Million US Dollars) annually as a result of non involvement of indigenous carriers of crude oil. Even cabotage activities involving movement of shore oil prospecting and drilling equipment are still controlled by foreigners thereby denying Nigeria maritime sector and the federal government a lot of accruable revenue. Maritime transport however, has provided opportunity for inland waterway transport, coastal and high sea trading and has also made it possible for Nigerians to develop the skill for fish and shrimps trawling enterprise. In a word, maritime transport has engendered employment for a sizeable number of Nigerian in various maritime related occupations. It has accounted in part for the urbanization and industrialization of the nation as well as giving a boast to Nigerian’s trade and commercial relation with the outside world. A coastal national without security consciousness is a susceptible to attack from the seas. Maritime transport however, made it imperative for the establishment of one of the most sophisticated naval force in the west Africa sub-region. The letter carries out security surveillance of Nigeria’s territorial waters and serves as a shied to merchant trade and distress. Besides, the protection of maritime pollution is closely monitored especially with the current rolls of NIMASA (formerly NMA) in pollution control activities and surveillance. Without any incline of a doubt, maritime trade has played a crucial role in Nigeria’s economic development but such roles could be largely improved upon if and when various maritime agencies such as the Nigerian Port Authority (NPA), National Maritime Authority (NMA now NIMASA), Shippers’ Council, Nigerdock among others, work closely with one accord to better the lot of the industry in Nigeria.

2.2.3 TRENDS IN SHIPPING ECONOMICS
According to Addico [200] the economic status of any shipping operation will be determined by the relative levels of costs (capital and operating) and revenues. The demand and freight rates, which determine revenues are presently at severity increased level in all shipping sectors. Given the global nature of the shipping business, the changes in market tends to affect all operators. Competition among commercial fleets for the available revenues is intensified by political factors. More and more countries have instituted cargo preference policies reserving some or all cargo for their own fleets. In oddities some countries have rationalized, noncommercial fleets that are insensitive to non profitable freights rates.
Traditionally, operators in the liner trades have formed cartels or adopted cooperative business practices within conferences that are intended to restrict competition and allocate the available market. Such practices are common worldwide and competition is even more restricted in non U.S. trades. Bulk operators, on the other hand, traditionally have favoured and followed practices of open competition. Bulk shipping also has been populated by many individual entrepreneurs who take extreme risks for high returns.
Present economic conditions and the massive oversupply of bulk-ship tonnage, placing some large banks at risk, have led some to reconsider bulk-shipping practices. The larger economic risks of future shipping ventures probably will foster industry restructuring towards managing competition.
There are wide variation in both the capital and operating costs among various countries. National policies should be provided to protect and promote national fleets economic equation as well as capital cost which is a major concern to shipping interests. New investment packages are becoming larger and more difficult to finance. Joint ventures and cooperative arrangements are growing and there is a trend toward reducing high risk-investment caused by speculative building in the past.
Increasing fuel cost are felt by all fleets. For U.S. – flag vessels, they currently represent nearly 50 percent of operating cost as compared to 10 to 15 percent in the early 1990’s.
Response include both changes in ship design and propulsion systems have notably shifted from steam to diesel ships, and changes in operating to increase fuel efficiency. While fuel prices currently are higher than in recent past, there is need to study operating cost.

2.2.4 OVERVIEW OF SHIPPING MARKETS –THE CURRENT TREND
Chiazor (2006) noted that shipping is a complex industry. It is segmented into several markets differentiated by ship type, trade requirements, organization and geographical location. From the perspective of maritime economics, shipping is divided into two major segments viz. bulk shipping and liner shipping.
shipping emerged as a dominant sector of the shipping industry in the decades following World War II. Bulk tonnage accounts for close to three quarters of the world merchant fleet. Most of the bulk cargos are drawn from the raw material trade such as oil, iron, coal and grain, and it is commonly described as Bulk commodities. There are four main categories of bulk cargo: Liquid bulk – requires tanker transportation. The main ones are crude oil products, liquid chemicals such as caustic soda, vegetable oils, and wine. The size of individual consignment varies from a few thousand tons to half a million tons in the case of crude oil. Minor bulk – cover the many other commodities that travel in shiploads. The most important are steel products, cement gypsum, non-ferrous metal ores, sugar, salt, sulphur, forest products, wood chips and chemicals. Specialist bulk cargoes – includes any bulk cargoes that present handling or storage problems. Motor vehicles, steel products, refrigerated cargo and special cargoes such as cement plant or prefabricate building fall into this category.

The five major bulks – cover the five homogenous bulk cargoes i.e iron ore, grain, coal phosphate and Bauxite which is transported satisfactorily in conventional dry bulk carrier or teen Decker. Liner shipping – The transport of general cargo is the domain of liner shipping. Liner vessels operate with fixed and pre-announced sailing schedules and itinerary. Liner vessels carry general cargoes which consists of consignment of less than ship load or hold size and therefore, too small to justify setting up a bulk shipping operation. In addition they are often of high-value or delicate cargoes that require special shipping services and for which the shipper requires a fixed rather that a fluctuating market rates. The most important classes of general cargo from a shipping view point are: Loose cargo – individual items and packages of varying size and weight like boxes, pieces of machinery, drums, bags, baling etc, each of which must be handled and stowed separately. Containerized cargo – standard boxes, usually 8 feet wide, often 8.5 feet high and 20,30, or 40 feet long filled with cargo. Palletized cargo – cargo packed onto a pallet for easy sticking and fast handling. Pre-slung cargo – small items such as planks wood lashed together into standard – size packages. Refrigerated cargo – perishable goods that must be shipped, chilled or frozen, in insulated holds or containers. Roll able cargoes – Automobiles, machinery and equipment, roll –on roll off.

2.2.5 THE GLOBAL EVOLUTION OF CONTAINERIZATION
According to Kummi (2007), before the advent of containerization, most general cargo
was shipped in loose form. This each item had to be packed and stowed into the Ocean Liner. This w lso exposed cargo to the risk of damage or pilferage. As a result, ships spend two thirds trading life in ports and cargo handling costs had escalated to more than one –thirds of the total costs of the ships-owner. Liner shipping was headed for bankruptcy and the need to find an urgent solution became imperatives. The introduction of containerization mid – 1970’s changed everything, and launched liner shipping into a revolution that continues to shape the industry. As a highly labour-intensive activity that was slow, expensive and difficult to execute. Furthermore, shipping lines are integrating their operations vertically to enable them assume effective control of their supply chains. This trend has witnessed shipping lines extending the scope of their operations beyond their traditional services to include marine terminal operations. Inland transport, warehousing, and freight forwarding. This trend has given rise to what has been termed one-stop logistics shopping.
The expansion of container operations across the globe has also given rise to global port operators specializing in the management and operation of container terminals. Prominent among these global port operators are Hutchion Port Holding, PSA Coprporaation and APM Terminals. The changes that have occurred in the shipping and ports sectors over the last few decades can be reviewed in the large forces that have changed the structure of the global economy. The fundamental underlying factor has been an increased reliance on international trade as the primary engine of economic growth and development, thanks to globalization. The reality is that the global economy requires goods and resources to be transported cheaply and efficiently around the world. The container shipping industry has made this process possible. Consider that in a year, a typical container ship travels nearly 300,000 kilometer. That is more than seven times around the world, or three quarters of the distance to the moon. This means that in a typical container ship’s lifetime of about 26 years, it travels the equivalent distance to the moon and back nearly ten times. Multiply that by today’s 4,000 containers shipping becomes apparently an economic activity. And this is what keeps the globe running.

2.2.6 CONTAINER TRAFFIC PERFORMNACE
According to Drewry Shipping Consultants Ltd (2007) estimates, loaded containers moved across the oceans in 2007 was 141 million TEUS. African accounts for 3 percent of global container handled in seaports. See figure 2.8 infact, of the league of top 100 container ports of the world in 2006, only three were in Africa. Two of these 9Ports Said and Demietta) are in Egypt and one (Duban) in South Africa. There is none in East, Central and West Africa while this situation points to the poor performance of the economies and the low participation of African countries in the high value end of the world trade, it also points to the low level of income and investments of these regions.

2.2.7 OWNERSHIP OF MERCHANT NAVY FLEET
Ishola (2008) asserted that the world merchant fleet grew by 8.4 per cent in 2006 to reach 1.04 billion deadweight tones. The total tonnage on order was 6,908 vessels with a deadweight tonnage of 302.7 million. Developing countries controlled about 31.2 per cent of the total world deadweight tonnage. Developed countries 65.9 per cent and economies in transition took the remaining 2.9 percent. The world fleet of cellular vessels totaled 3,904 at the beginning of 2007, with a total TUE capacity of 9.4 million. And this represent an increase of 11.7 per in the number as vessels and 16.2 per cent in TEU capacity. Nationals of 35 countries control 97.17 per cent of the total world merchant fleet Africa controls less than one per cent of the total world merchant fleet measured in deadweight tones. The above analysis indicate that overall Africa has lagged behind in reaping the benefits of globalization and international shipping trade. The situation of Africa reflects the inability of African countries to integrate into global economy and thereby take advantage of the opportunities thereof. Part of this problem stems from the structural defects in the economic development policy of African countries and the inefficiencies in its logistics and supply chain system. Available evidence suggest that producers in Africa often face a transport disadvantage vis-a-vis their competitions. The precise magnitude and nature of this disadvantage varies between countries, but in general, transport costs are high.
TABLE 2.1 DISTRIBUTION OF THE WORLD FLEET AND WDT CAPACITY OF CONTAINERSHIPS, BY COUNTRY GROUP-BEGINNING 2007
Country Group Dwt Share (%) of world total
World Total 128,321,475 100.00
Developed Countries 36,475,603 28.43
Countries with Economies in Transition 167,314 0.13
Developing countries of which: 22,005,522 17.15
Africa 186,895 0.52
Asia 1,114,009 16.45
Oceania 41,476 0.03
Other unallocated 51.364 0.04
10 major open and international registries 69,261,672 54.26
Source: Adapted from UNCTAD Review of Maritime Transport-2007. page 26.

TABLE 2.2 FREIGHT COSTS AS PERCENATAGE OF IMPORT VALUE FOR VARIOUS REGIONS OF THE WORLD 1990-2005
1990 1994 1996 1997 1998 2000 2001 2002 2003 2004 2005
WORLD TOTAL 5.22 5.4 5.25 5.24 5.06 5.6 6.11 5.5 5.4 5.1 5.9
DEVELOPED COUNTRIES 4.4 4.29 4.19 4.17 .07 4.3 5.12 4.1 3.9 4.7 4.8
DEVELOPING COUNTRIES 8.6 8.25 8.06 8.04 8.06 8.8 8.7 9.1 9.1 5.5 7.7
AFRICA 11.05 1.05 11.41 11.53 11.86 12.9 12.65 11.8 11.9 10.3 10
AMERICA 8.17 7.97 7.08 7.02 6.86 8.7 8.57 10.5 9.8 4.4 4.4
ASIA 8.19 7.97 7.97 7.9 8.11 8.5 8.35 8.5 8.6 5.9 5.9
OCEANIA 12.26 12.24 12.33 12.36 12.26 11.8 11.7 10.9 12.3 10.0 9.6
Source: Plotted from Data from UNCTAD-Review of Maritime Various Editions
As indicated in the figure 2.2 above, Africa has one of the highest freight factors (percentage of freight in the value of goods) in the world. Oceania is the only other region in the world that has this particular problem. It is therefore not surprising that Africa’s share in world trade, it economic growth, production capacity and stock of foreign direct investment have declined steadily over the years a situation that points to African being a marginal beneficiary of globalization and international shipping trade.

2.2.8 OPPORTUNITIES FOR AFRICAN MARITIME COUNTRIES
Chiori (2007) in her study revealed that shipping offers a myriad of opportunities to Africa maritime and landlocked countries. Basically, shipping has the great potential to open up Africa markets and accelerate the pace of socio-economic development. Growth international trade would stimulate a boom in the maritime and allied logistic sectors of economies of African countries. In order to take advantage of the opportunities offered by shipping African countries must initiate policies and programmes that will integrate their economies into the global economy. Among the opportunities for African maritime nations are the following.
Expansion of the Volume of International Trade: Globalization has resulted in the accelerated growth of world seaborne trade. In fact, world trade has grown faster than and the world economy (GDP) over the last couple of decades. Shipping promotes liberalized and export-oriented economic development policies in place of protectionist policies like import substitution. Export oriented development has the potential to promote the growth of traffic through African seaports.
Industrialization of African Economies: As a result of shipping, businessmen have been scouting round the globe in search of cheap source of raw materials and other factors of production. This offers African Countries that are endowed with raw materials to expand their reports. The counties with competitive factors also stand the chance of attracting foreign direct investments in the manufacturing sector. Shipping also opens opportunities for African countries to market their manufactured goods. All these developments would support the expansion of the maritime sector of Africa.
Development of Maritime Logistics and Allied Sector: Captain Turkson of the Regional Maritime Academy, Ghana in a study in 2007 believed that shipping and its attendant growth in trade provide the stimulus for African maritime nations to growth and develop their maritime and allied logistic sector of their economies. Sectors such as Ship owning, Ship Management, Ship Brokerage, Ship Finance, Marine Insurance, Maritime Law and Arbitration, Marine Training and Education would experience some boom. Other sectors that can be targeted include inland transport networks (Road, Rail, Inland Waterways and Pipelines), port management and operations, warehousing, freight forwarding and distribution. Improvements in these sectors will enhance logistic and supply chain management, reduce transport and distribution costs, enhance the competitiveness of African exports, and accelerate the integration of African economic into the global economy.

Concentration of Shipping Lines: shipping lines, especially the container lines have been concentrating to take advantage of economies of scope and scale.
There has emerged what is called “Mega Carrier”. Currently, the Top 25 Container lines control about 84 cent of the total TEU capacity available or no order. This growing concentration, coupled with the government subsidies given to ship building in the developed and Asian countries will make it difficult for African countries to relaunch their fortunes in the ownership of shipping tonnage. This Mega Carrier can make life very difficult for any shipping companies that African countries will promote.
The Vertical Integration of Shipping Services: Shipping lines have been transforming themselves into one stop logistic shops by integrating their operations vertically. This practice has posed a serious threat to indigenous African shipping agencies, freight forwarders, warehouse operators and inland transport operators.
Already in many African countries ship agencies operating on the traditional model have collapsed or the verge of collapse as most of the main lines have established their own agencies. This trend will pose a serious treat to the development offers.
The opportunity for African indigenous logistics firms to partner with foreign ship-owners who control large volumes of freight is of paramount importance. Such partnerships will offer the opportunity for transfer of technical and managerial know-how.
Meg Vessels: The advent of mega container ships presents a major challenge to ports all over the world. They require deep access channel, alongside draughts, giant shore cranes, and massive shore back up support. For African countries, this will mean further marginalization if they are unable to make the required investment to receive such vessels.
Environmental Issues: As African countries develop their transport and logistics infrastructure, major environmental problems would emerge. There is growing concern about the impact of transport on the environment. This means that environmental considerations in the design of transport projects would add to the costs and also increase project lead times.
2.2.7 IMPORTANCE OF MARITIME TRADE IN NIGERIA’S ECONOMY
Balarabe (2004) believed that perhaps unlike any other industry, the maritime industry on a global level provides a horde of opportunities for investment.
First and foremost, it has served to stimulate import and export trade by way of proving surface transport through which goods are moved by sea on a massive scale.
Indeed, since the arrival of Johnl d’ Averino, the Portuguese explorer at the Benin River in 1485, trading contact by sea had been established between the Europeans and the West African sub region and Nigeria in particular. The obnoxious trade in Africa, the slave trade would have been impossible on the scale it was carried out but for the usage of the sea routes by ship. Shipping trade also made it possible for colonialists to establish a firm hold on settler economies such as in South Africa where in 1627 the Dutch explorer Jan Riebek and his successors ensured that the natives continue to serve as cheap labour in mines and plantations. It also ensured the scramble for and partition of the African continent by Europeans, a phenomenon which was consummated at the Berlin conference in 1884 and 1885 primarily to ease the plunder of African seas. In all, it could be said that apart from the establishment of 3 lop-sided social contact between the Europeans and Africans, the maritime industry was decidedly exploitative of the African Continent in the beginning.
Nevertheless, maritime trade has played a major role in Nigeria’s economic development. It account for instance, for about 95% of the vehicular means of Nigeria’s International Trade. Besides, it has also acted as a cardinal force in Nigeria’s attempt to correct her trade imbalances with the industrialized nations of the world.
Indeed, since becoming a signatory to the UNCTAD code for liner conference in 1975, a number of bilateral and multilateral maritime agreements have been entered into by the Nigerian Government and this to a large extent has aided the sector in the movement of cargo in and out of the Nigerian shores.
According to Olokoba (2006), Maritime business has helped the process of diversification of Nigeria’s economy and has continues to provide employment opportunities to Nigerians as crew staff, mariners and dock workers in addition to various practitioners among which are freight forwarders. In fact, for as long as it existed, the Nigerian National Shipping Line (N.N. S.L) not only provided employment to Nigerians but also served as a pool or training ground for majority of the master mariners and other experienced professional people in Nigeria’s maritime sector up till today. The need for adequate training and re-training of personnel for the industry also culminated in the establishment of the Maritime Academy of Nigeria (MAN) at Oron-an institute devoted to the training of cadets and which has been upgraded to a Higher National Diploma awarding Institution.
Maritime transport also generates the much needed foreign exchange to the Nigerian economy. This is in the form of ship repairs, levies (such as the NMA 3% levy), taxes and port fees and charges among others. The Nigerdock for examples even though has not been known to have built any ocean-going vessel, has been meaningful engaged in the repairs and maintenance of ships and the construction of ferry-boats all of which constitute an integral part maritime transport. Besides it is the official policy of the National Maritime Authority to collect a very on the gross freight from any vessel that calls at the Nigerian port (for export and import purposes).
The rationale behind this is the desire to boost Nigeria’s merchant shipping fleet for the sake of effective lifting of her share of cargo. Whether this purpose was ever achieved through the disbursement of the Ship Acquisition Building Fund (SASBF) is another matter entirely. Since 1958 when oil was discovered in commercial quantity at Olobiri, Nigeria’s Oil Terminals such as in Bonny, Escravos, and Forcados have continued to play host to oil tankers of various profiled and sixes. Crude Oil has since displaced agriculture as Nigeria’s economic mainstay accounting as it were, for about 85% of Nigeria’s external reserves and buoyed the economy, the total exclusion of Nigeria’s indigenous carriers from the lucrative trade has been a subject of heated debate between the maritime practitioners and the Federal Government.
Igbecha in a study (2004) revealed that Nigeria loses about $800,000,000.00 (Eight Hundred Million US Dollars) annually as a result of non involvement of indigenous carriers of crude oil. Even caboatge activities involving movement of shore oil prospecting and drilling equipment are still controlled by foreigners thereby denying Nigeria maritime sector and the Federal Government a lot of accruable revenue. Maritime transport however, has provided opportunity for inland water-way transport, coastal and high sea trading and has also made it possible for Nigerians to develop the skill for fish and shrimps trawling enterprise. In a word, maritime transport has engendered employment for a sizeable number of Nigerians in various maritime related occupations. It has accounted in part for the urbanization and industrialization of the nation as well as giving a boost to Nigerians trade and commercial relation with the outside world. A coastal nation without security consciousness is a nation susceptible to attack from the seas. Maritime transport has however, made it imperative for the establishment of one the most sophisiticated naval force in the West Africa sub-region. The later carriers out security surveillance of Nigeria’s territorial waters and serves as a shield to merchant vessels in time of trouble and distress. Besides, the protection of maritime pollution is closely monitored especially with the current roles of NIMASA (formally NMA) in pollution control activities and surveillance.
Without any inkling of a doubt, maritime trade has played a crucial role in Nigeria’s economic development but such roles could be largely improved upon if and when various maritime agencies such as the Nigerian Port Authority (NPA), National Maritime Authority (NMA now NIMASA) Shippers Council, Nigerdock among other, work closely with one accord to better the lot of the industry in Nigeria.

CHAPTER THREE
RESEARCH DESIGN AND METHODOLOGY
3.1 DEFINITION OF AREA AND POPULATION OF STUDY
This study focuses of the impact of shipping trade on economic growth of Nigeria. The period 1976-2006 is therefore covered and no attempt is made to extend the area of study to other countries of the world.

3.2 SOURCES OF DATA
The study employs mainly secondary sources of data as collected from the following specific offices/sources.
i. CBN publications – Statistical Bulletin, Annual reports and Statement of Accounts, Economic and financial Review, Research Seminar papers etc.
ii. National Bureau for statistics – Annual Abstract of statistics

3.3 PROCEDURE FOR DATA ANALYSIS
The data generated for this study is analyzed employing both descriptive and inferential statistics. However, the three hypotheses formulated are analyzed using simple regression model. This is in view of the single explanatory variables (independent variables) involved in each of the three hypotheses of the study. Therefore, the analysis of variance (ANOVA), coefficient of determination and student t-test are all employed in the various tests.

3.4 OPERATIONAL DEFINITION OF VARIABLES/HYPOTHESES TESTING
The study is concerned with the analysis of the impact of shipment trade on the level of economic growth in Nigeria. Hence, the study requires the specification of the dependent and independent variables in order to encourage effective analysis.
In the three hypotheses, we have the following dependent variables respectively for hypotheses 1 through 3:
GDPt = Level of Gross Domestic Product in year, t:
EXT.RESt = Level of External Reserve in year, t:
EXTDEBTt = Level of External debt payment in year, t.
For all the three hypotheses however, the independent variable is given as:
SHIPEXPTt = Level of Shipment Export trade in year, t

3.4.1 HYPOTHESIS 1
H01: There is no significant relationship between shipping trade and the level of Gross Domestic Product in Nigeria.
a. The independent variable is the level of shipping trade from 1976-2006.
b. The dependent variable is economic growth proxied by the Level of Gross domestic Product for the same period and denoted as GDPt.
mathematically, therefore we have;
GDPt = f (SHIPEXPTt) + e . . . . .3.20
i.e GDPt = Bo + SHIPEXPTt + e . . . .3.21
Where:
GDPt = Level of Gross domestic Product in year, t:
SHIPEXPTt = Level of Ocean Shipping Trade in year, t
B1 = Estimated Parameter of Coefficient of
Regression
E = The error term
3.4.2 HYPOTHESES 2
H02: There is no significant relationship between the shipment trade and the level of External Reserves in Nigeria.
a. Here again, the independent variable is shipping trade (SHIPEXPTt) for the period under investigation, 1976-2006.
b. The dependent variable is the level of external reserve, EXTRESt.
This is denoted by EXRESt
Hence, mathematically, we have;
EXTRESt = F (SHIPEXPTt)
i.e (EXTRESt) = BO + B1 SHI[EXPTt) . . . .3.22
Where;
EXTESt = Level of External Reserves in year t:
Bo = Regression Intercept
B1 = Estimated Parameter of Coefficient of
Regression
E = Error Term
HYPOTHESES 3
Ho3: There is no significant relationship between the Shipment Trade and External Debt Payment.
A. Here, also the independent variable is the Shipment Trade, SHIPEXPTt
B. The dependent variable is the level of External Debt Payment. Hence, mathematically, we have;
EXTDEBTt = F (SHIPEXPTt)
i.e (EXTDEBTt) = BO + B1 SHIPEXPTt + Et.. . . .3.24
WHERE;
EXTDEBTt = External Debt Payment
SHIPEXPTt = Level of Shipping Trade in thousands of tones
Bo = Intercept
B1 = Estimated Parameter of Coefficient of
Regression
E = Error Term
3.5 TEST OF SIGNIFICANCE
3.5.1 TEST OF MODEL SIGNIFICANCE – ANOVA
For the hypotheses to be tested, it is pertinent, if not imperative for a test of the model as a whole to be conducted. Carrying out such a test has the advantage of confirming the appropriateness of the model specification. Two ways of achieving this are: (1) The analysis of variance approach and, (2) the coefficient of determination approach, both calculated from the regression mode.
The analysis of variance approach seeks to split the variations of the Dependent variable (Gross Domestic Product, External Reserve and External Debt Payment, respectively for hypotheses 1, 2 and 3) with its components parts.
Variations in the Dependent Variables (GDPt for hypothesis)
1, EXTRESt for hypothesis 2 and EXTDEBT, for hypothesis 3) that are accounted for by the explanatory variables, are called the EXPLAINED VARIATIONS. Other sources not thus explained are due to random or chance factors. These are estimates of the population disturbance variable ‘u’ represented by ‘e’ otherwise called the RESIDUALS or error term

Table 3.1 Hypothetical ANOVA table
Source of variation Sum of squares (SS) Degree of Freedom (if) Mean Square (MS) F-ratio
Regression SSR = ∑Y2R2 K MSR = SSR K F = MSR
Residual SSE=SST – OSSR = ∑y2 (1-R2) n-k-1 MSE=SSE n-k-1 MSE
Total SST = ∑y2 n-1

Where;
SSR = Sum of squares of the regression
SSE = Sum of Squares of the error term
SST = Sum of squares total variation
K = Number of independent variables
N = Number of observations.
Note R2 = b1∑X1Y + b2 ∑X2Y
∑Y2
3.5.2 TEST OF THE MODEL; COEFFICIENT OF DETERMINATION AND THE F-TEST APPROACH
Another method to test the statistical significance of the estimated regression model is through the coefficient of determination. (R2), calculated from the regression, R2 fives the proportion of the total variation in the dependent variable.
R2, from the sample is a statistical estimate of the population, p2, (row-squared. Value of R2 ranges between 0 and 1. in setting up the test, the following hypothesis is tested;
HO1: P2=O (i.e. the regressor, in a given year have no significant relationship with the Actual dependent for that year).
HA1: P2>O (One-tabled 0 test of significance) (i.e at least there is a significant relationship between one of the independent variables and actual dependent variable.

DECISION RULE
If f-ratio (calculated) is greater than the f-ratio (tabulated, at Alpha a –level of significance, and (k-1) (n-k), degrees of freedom, then we reject Ho and Accept H1, and state that there is some truth in the estimated model (-i.e., the regression model is significant since the regressors significantly account for the variation in the dependent variable.
Here, F-ratio (calculated) = (R2)/(K-1)
(1- R2)/(N-K)
Where:
R2 = R square of the model
K = No variables (independent and dependent)
N = No of observations.

3.5.3 TEST OF THE SIGNIFICANCE OF THE EXPLANATORY VARIABLES
Having established the significance of the estimated model as a whole, we now go further to test the specific strengths of the various regressors in bringing about this result. And we can check this through conducting T-tests on the estimated parameters of the regressors.
The test –statistic, t-ratio is calculated thus:
t-ratio = βK = estimate of the population parameters for the regressors and Se (βK) = Standard error of the estimate.

DECISION
If absolute value, βk > tn-k a/2
Se (βk)
Level of significance, we reject Ho and accept H1: and conclude that the variable belongs significantly to the model.

3.6 ASSUMPTIONS OF THE LINEAR REGRESSION MODEL
In choosing the above model, we make the following principal assumptions about our population disturbance term, ut. These assumptions about the distribution of the values of ‘ut’ are very crucial for the estimates of the regression. These include the following:
a. Assumption of Randomness: The value “ut” may assume in any given period depends on chance ‘ut’ being a random real variable may be positive, zero or negative, each with a certain probability of occurrence for a particular period.
b. Assumption of Zero Mean: The mean value of ‘ut’ in any particular period is zero.
c. Constant Variance Assumption: The variance, 82’ut’ for each explanatory variable is constant. This being the case, ‘ut’ will show the same dispersion for all values of the explanatory variables. (E(u2t) = 82. This is called the assumption of HOMOSCEDASTICITY. If this assumption does not apply, the condition of HETROSCEDASTICITY obtains under which condition, therefore, it would be difficult for us to construct confidence intervals on the regression estimates. These tests, therefore, become inapplicable.
d. Normality Assumption: The variable ‘ut’ has a normal distribution that is, the values of ‘ut’ (for each explanatory variables) have a bell shaped symmetrical distribution. The above four principal assumptions are symbolically represented as; ut – N (O, 82 ut), that is, ut is a random variable, with a normal distribution, zero mean and a constant variance.
e. Other Assumption of the Model
i. Cov (uiuj) – O (there is no covariance between the disturbance terms of different observations.
ii. Cov (Xisui) = O (No covariance between the disturbance term and the explanatory variables).
iii. Cov (XIS) = O (No Cocariance between the explanatory variables (i.e No muticollinearity exists).
iv. The relationship is IDENTIFIED – that is the model has a unique mathematical form. Its explanatory variables are not found in any other mathematical equation related to phenomena being studied.
v. It is also assumed that the model is correctly SPECIFIED mathematically.

CHAPTER FOUR
DATA PRESENTATION, ANALYSIS AND INTERPRETATION
4.1 INTRODUCTION
This chapter focuses on the presentation, analysis and interpretation of the data collected mainly through secondary sources. Hence, the emphasis here is to estimate, analyze and interpret the model as already formulated in chapter three of this project. Also, the three hypotheses of chapter one are equally tested in order to draw policy implications.
As already stated, we need to note that only secondary data were employed in carrying out the tests, supported by other analytical tools as percentages, charts etc, where applicable: Sue to the nature of the hypotheses, a simple linear regression model was employed to test each of the three hypotheses. To achieve clarity, we also observed an orderly presentation in this chapter.

4.2 DATA PRESENTATION
This section is devoted to the presentation of data used in estimating the three models as developed and enumerated in chapter three. The data were sourced mainly from secondary sources thus;
i. The Central Bank of Nigeria (CBN) publications;
ii. National Bureau for Statistics (NBS)
iii. Maritime Data Bank
The data for these analyses are presented in Table 4.1 below. Table 4.1: The Nigeria data set on Nigeria’s total ocean shipment export trade thousands of tones, Gross Domestic Product, External reserve and External Debt Service Payments in millions, from 1976 to 2006.
Table 4.1 Nigeria’s Total Ocean Shipment Export, Gross Domestic Product, External Reserve and External Debt Service in millions, 1976-2006.
YEAR GROSS DOMESTIC PRODUCT N’m EXTERNAL RESERVE N’m EXTERNAL DEBT N’m SHIPMENT EXPORT N’m
1 1976 88854.30 3057.60 30.40 894.00
2 1977 96098.50 2521.00 33.40 684.00
3 1978 89020.90 1249.10 160.80 684.00
4 1979 91190.70 3043.20 182.90 2255.00
5 1980 96186.60 5445.60 110.40 2152.00
6 1981 70395.90 2424.80 513.60 1227.50
7 1982 70243.10 1026.50 775.20 1546.00
8 1983 65958.00 781.70 1335.20 503.90
9 1984 62474.20 1143.80 2640.50 458.90
10 1985 68286.20 1641.10 3718.00 478.60
11 1986 70806.40 3587.40 2502.20- 636.00
12 1987 71194.90 4643.30 3574.60 425.10
13 1988 77733.20 3272.70 8149.70 659.00
14 1989 83179,00 13457.10 15577.70 1007.00
15 1990 92238,50 34953.10 30855,80 1923.40
16 1991 94235.30 44249.60 35334.20 3010.90
17 1992 97019.90 123992.5 11327.90 2779.20
18 1993 99604.20 29345.60 38266.40 1175,00
19 1994 100936.7 36455.90 34722.80 2098.90
20 1995 103078.6 1019208 122446.1 1579.90
21 1996 106600.6 284603.1 147048.0 1368.90
22 1997 109972.5 65662.20 149122.1 1687.00
23 1998 113509.0 65895,10 157331.0 1912.80
24 1999 116655.5 120585.2 158471.0 2419.50
25 2000 121207.8 166355.2 161112.8 4345.10
26 2001 126323.8 318968.2 173117.4 8349.40
27 2002 131489.8 321520.1 182224.2 9446.00
28 2003 136460.0 413600.4 200114.9 7988.00
29 2004 145380.0 473702.1 201113.2 607759.0
30 2005 147105.0 514310.7 201922.5 634148.0
31 2006 148022.0 582607.1 203456.6 652094.0
Source: CBN Statistical Bulletin and National Bureau for statistics
As already stated, Table 4.1 above, contains the data set used in testing all the three hypotheses. It therefore, shows the value of Total Ocean Shipment Export, External Reserve, External debt Payment and Gross Domestic Product of Nigeria, for the period, 1976-2006.

4.3 DATA ANALYSIS AND HYPOTHESES TESTING
4.3.1 THE INFLUENCE OF SHIPMENT EXPORT TRADE ON ECONOMIC DEVELOPMENT
In order to determine the effect of shipment Export trade on Gross Domestic Product, we therefore carried out a simple regression model as detailed in chapter three. Hypothesis 1 states thus:
Ho1: There is no significant relationship between Shipment Export Trade and the level of Gross Domestic Product in Nigeria.
Ha1: There is a significant relationship between shipment Export Trade and the level of Gross Domestic Product in Nigeria.
The result of this hypothesis is presented in Table 4.2. As already pointed out in chapter three, the first test carried out was the analysis of variance (ANOVA) and the F-test using the coefficients of determination (R2)

TABLE 4.2 HYPOTHESIS 1 RESULT/OUTPUT
0.632 R
0.399 R2
0.379 Adjusted R2
31 OBSERVATIONS
1 Predictor Variable
Y Dependent Variable
Variables intercept x1=SHIPEXPT Coefficients
β0 =
β1 =
94428.359
0.084 Std error
3753.777
0.019 T(df =10)
4.390 Significance

0.000****
ANOVA
Source SS DF MS F = 9.274 0.000****
Regression 7.5E + 009 1 7549656026
Residual 1.9E + 010 29 391701404.5
TOTAL 2E + 010 30

NB: **** significant at 0%; ***significant at 1%,\; ** = significant at 5%; F = ratio tabulated df (1,25) 1% = 7.77%, 5% = 4.17, t = ratio tabulated (df = 19); 1% = 2.462; 5% = 1.699.

4.3.1.1 TEST OF MODEL SIGNIFICANCE – ANOVA METHOD
In order to confirm the specification status of our model, we employ two approaches. One is through the analysis of variance or ANOVA, for short. The other method is the use of coefficient of multiple determination, R2.
The ANOVA table from the regression result is as presented in table 4.2 and appendix 1.
From Table 4.2, the lower degree of freedom (K – 1; 2 – 1 = 1) and the upper degree of freedom (N – K; 31 – 2 = 29), for both 99% and 95% confidence levels.
DECISION RULE
If the calculated F – ratio is greater than the tabulated F – ratio or critical F –ratio, we reject Ho and accept Ha. Here, the F – ratio calculated (19.274)> F – ratio theoretical (7.77,4.17), at both 1% and 5% levels of significance respectively. Hence, we reject Ho and accept Ha, to conclude that Shipment Export Trade has a significant relationship with the level of Gross Domestic Product in Nigeria.

4.3.1.2 TEST OF MODEL SIGNIFICANCE, R2+ METHOD
Another way to test the model significance is to through the coefficient of determination or R2 approach. The difference between this method and the earlier on lines in the calculation of the F-ratio.
Here, the F-ratio is calculated thus:-
F – ration calculated = (R2) / (K – 1)
(1 – R2) / (N – K) = ………………………..4.1
Where;
R2 = 0.399
K = 2
N = 31
Hence,
F – ratio cal = (0.399) / (2 – 1)
(1 – 0.399) / (31-2)
= 19.274
Here again, F – ratio cal (19.274) > F – ratio tabulated (7.77, 4.17). Hence, we reject Ho and accept Ha to conclude that the model is actually significant, and that there is a significant relationship between the Shipment Export Trade and the level of Gross Domestic Product in Nigeria. The resulting model is:
GDPt = 94428.359 + 0.084 SHIPEXt ………………………………………..4.2

4.3.1.3 TEST OF THE SIGNIFICANCE OF THE EXPLANATORY VARIABLE
Having tested the significance of the model, we go a step further to test the significance of the Shipment Export Trade in contributing to the total variation in the level of Gross Domestic Product in Nigeria. This is achieved through the student t-test. We again refer to the simple regression result in Table 4.2 and appendix 1.
DECISION RULE
If the calculated t is greater than the tabulated t (df = 29), we reject Ho and accept Ha to conclude that the variable belongs significantly, meaning that the Shipment Export Trade makes a significant contribution to the dependent variable, Gross Domestic Product.
Here, the t – calculated (4.390) > t – tabulated (2.462, 1.699), respectively for 1% and 5% levels of significance. We therefore reject Ho and accept Ha to conclude that the Shipment Export Trade makes a significant contribution to the level of Gross Domestic product in Nigeria, for the period under consideration.

4.3.2 THE INFLUENCE OF SHIPMENT EXPORT TRADE ON NIGERIA EXTERNAL RESERVE
Hypothesis two states as follows:-
H02: There is no significant relationship between the Shipment Export Trade and Level of External Reserve.
Ha2: There is a significant relationship between Shipment Export Trade and level of External Reserve.
To test this hypothesis, we refer to the simple regression result in Table 4.3
Table 4.3 Hypothesis 2 result/output
0.5.28 R
0.279 R2
0.254 Adjusted R2
31 Observations
1 Predictor Variables
Y Dependent variable
Variables intercept x1=TOMAC Coefficients
β0 =
β1 =
108515.50
0.664 Std error
38931.845
0.198 T(df =19)
3.350 Significance

0.002****
ANOVA
Source SS DF MS F = 11.222 0.002****
Regression 4.7E+011 1 4.728E +011
Residual 1.2E +012 29 42133568707
TOTAL 1.7E + 012 30

NB: NB: **** = significant at 0%; *** significant at 1%; *** = significant at 5%; F = ratio tabulated df (1,19) 1% = 7.77, 5% = 4.17, t = ratio tabulated (df = 19); 1% = 2.462; 5% = 1.699.

4.3.2.1 TEST OF MODEL SIGNIFICANCE –ANOVA METHOD
Here again, we test for the specification status of the model through the analyis of variance. Therefore, we refer to Table 4.3 by comparing the calculated F – ratio with the F – ratio tabulated.
DECISION RULE
Since the F – calculated (11.222) > F – ratio tabulated (7.77,4.17), we therefore, reject Ho and accept Ha, to conclude that there is a significant relationship between Shipment Export Trade and the level of external Reserve.
4.3.2.2 TEST OF MODEL SIGNIFICANCE – R2 METHOD
Also, testing through the coefficient of determination approach, we adopt the formula;
Thus;
F – calculated = (R2) / (K – 1)
(1-R2) / (N-K)
Where:
R2 = 0.279
K = 2
N = 31
= (0.279) /2-1)
(1-0.279) / (31-2) F – calculated = 11.222
Decision Rule
With F – calculated (11.222) > F – tabulated (7.77, 417), we reject Ho and accept Ha to conclude that there is a significant relationship between Shipment Export Trade and the level of External Reserve Nigeria. The resulting estimated model is presented as:
EXTRESt = 108515.50 + 0.6645 SHIPEXPTt ………………………..4.4
4.3.2.3 TEST OF THE SIGNIFICANCE OF THE EXPLANATORY VARIABLES
In order to conduct this test, we employ the student t – test. Therefore, with the calculated t – test (3.350) > t – tabulated (2.462, 1.699), we reject Ho and accept Ha to conclude that the Shipment Export Trade contributes significantly to the level of External Reserve.
4.3.3 THE INFLEUNCE OF SHIPMENT EXPORT TRADE ON EXTERNAL DEBT PAYMENT
This hypothesis states as follows:
Ho3: There is no significant relationship between Shipment Export Trade and External Debt payment.
Ha3: There is a significant relationship between the Shipment Export Trade and External Debt Payment.
The result of this hypothesis is presented in Table 4.4 thus;
Table 4.4 Hypothesis 3 result/output
0.532 R
0.283 R2
0.258 Adjusted R2
31 Observations
I Predictor Variable
Y Dependent variable
Variables intercept x1=PERt Coefficients
β0 =
β1 =
57857.313
0.231 Std error
13426.651
0.068 T(df =10)
Significance

0.002****
ANOVA 3.384
Source SS DF MS F = 11.454 0.002****
Regression 57E+010 1 57401807107
Residual 15E +011 29 5011337355
TOTAL 2.0E +011 30

NB:**** = significant at 0%; *** = significant at 1%; ** = significant at 5%; F = ratio tabulated df (1,19) 1% = 7.77, 5% = 4.17, t = ratio tabulated (df = 19); 1% = 2.462; 5% = 1.699.

4.3.3.1 TEST OF MODEL SIGNIFICANCE – ANOVA METHOD
This anova test compares the F – calculated with F – ration tabulated.
DECISION RULE
Since F – calculated (11.454)> F – ratio tabulated (7.77,4.17) respectively for 1% and 5% we reject Ho and accept Ha to again conclude that the model is significant hence, there is a significant relationship between Shipment Export Trade and Nigeria’s external debt payment.
4.3.3.2 TEST OF MODEL SIGNIFICANCE, R2
This is achieved through the formula thus;
Fecal = (R2) / (K – 1)
(1 –R2) / (N-K)
= (0.283) / ( 2-1)
(1.0.283) / (31-2) = 11.454
Also, since F – calculated (11.454) > F – ratio tabulated (7.77, 4.17), we reject Ho and accept Ha to conclude that the model is significant. The resulting model is thus:
EXTDEBTt = 57857.313 + 0.231 shipextt………………..4.5

4.3.3.3 TEST OF THE SIGNIFICANCE OF THE EXPLANATORY VARIABLE
This is also carried out through the student t – test
DECISION RULE
Since the t – ratio calculated (3.384) > – tabulated (2.462, 1.699), we reject the Ho and accept Ha to conclude that the Shipment Export Trade contributes significantly to External Debt Payment.

4.4 DISCUSSION OF RESULTS
4.4.1 HYPOTHESIS ONE
From the results of hypothesis one, it is interesting to note that the Shipment Export Trade contributes significantly to the level of Gross Domestic Product in Nigeria. Equally revealing is the fact that this model shows about 63% level of relationship between the explanatory variable or Shipment Export Trade and the Economic Development of Nigeria, represented by the value Gross Domestic product, the dependent variable (see the ANOVA result in table 4.2 and appendix 1). Similarly, with an R2 of about 40%, it therefore, suffices to say that the explanatory variable has been able to explain at least, 40% of the variations on the level of Gross Domestic product. Also, the results of other, test statistics, like the adjusted R2, of about 37% equally mean that after adjusting for errors, the variation in Shipment Export Trade can still explain at least 37% of the variation in Gross Domestic Product (GDP). The resulting estimated model from this hypothesis 1 is thus:
GDPt = 94428.359 + 0.084SHIPEXPTt ……………………………..4.2
From the above equation 4.2 above, the model as a whole bears an interesting coefficient as it posits a significant positive relationship the explanatory variable and the dependent variable. All things being equal, a unit increase in the value of the Shipment Export Trade, will bring about an increase of 0.084 unit in the level of Gross Domestic Product.

4.4.2 HYTPOTHESIS TWO
From our hypothesis two, seeking to determine the nature of the relationship between the Shipment Export Trade and the level of Gross External Reserve, as one of the economic indicators, we notice some remarkable results. First, the study demonstrates an interesting correlation between the variables. For instance, with an R of 52.8%, it means there is a fairly strongly correlation or relationship between the External Reserve as the independent variable. Equally towing this pattern are the results of the R2 and the adjusted R2 of 27% and 25% respectively. What this means is that the variation in the Shipment Export Trade has been able to explain at least, 27% of the total variation in the volume of external reserve.
These results have been supported by the positive coefficient of the model. Thus, meaning that the Shipment Export Trade contributes positively to the level of External Reserve in Nigeria and a unit increase in the Ocean Shipping Export Trade is expected to contribute about 0.664 unit to the level of external reserve of Nigeria. The estimated regression model for this relation is presented thus:
EXTREt = 108515.50 + 0.6645SHIPEXPTt …………….4.4

4.4.3 HYPOTHESIS THREE
In the last hypothesis, hypothesis three, similar results were equally achieved. Recalling that the focus was to determine the nature of relationship between the Shipment Export Trade and the level of External Debt Payment, the study posted about 53% level of correlation between the variables under investigation. Also, it shows, with an R2 of about 28%, it means that at least, 28% of he total variation in the level of External Debt Payment owes its explanation to the variation in the Shipment Export Trade.
In the same vein, the Shipment Export Trade bears a direct positive relationship with the level of Eternal Debt Payment. Hence, a unit increase in the Shipment Export Trade will lead to about 0.231 unit increase in the level of External Debt Payment. The resulting estimated model is as follows:
EXTDEBTt = 57857.313+0.231 SHIPEXPTt ……………………….4.5

CHAPTER FIVE
SUMMARY OF FINDINGS
5.1 SUMMARY OF FINDINGS
This study investigated the impact of Shipment Export Trade on Nigeria’s Economic Development, covering the period, 1976-2006. three major hypotheses were formulated and tested with these objectives in mind.
1) To determine the nature of relationship between Shipment Export Trade and the level of gross domestic product in Nigeria.
2) To ascertain if Shipment Export Trade exhibits a significant relationship with the level of External Trade in Nigeria.
3) To determine whether a significant relationship exists between Shipment Export Trade and the level of External Debt payment in Nigeria.
4) To determine whether the Shipment Export Trade contributes significantly to Economic Development.
5) In all cases, the hypotheses proved significant even at 0% alpha level or 100% confidence level, thus, suggesting that Shipment Export Trade exerts a significant influence on the levels gross domestic product, external reserve an external debt payment, respectively for hypotheses one through three.

5.2 CONCLUSION
The study is on the impact of Shipment Export Trade on economic development of Nigeria, covering a period of thirty –one years from, 1976-2006. Three hypotheses were actually tested for the following conclusions to be reached:
1) Shipment export trade has actually exerted a positive effect on the economy as a whole.
2) Shipment Export Trade exerts a significant positive effect on the level external reserve in Nigeria.
3) Akin to the two revelations above, the Shipmen Export Trade exerts a significant effect on the level of Nigeria’s external debt payment, especially for the period under investigation, 1976-2006.

5.3 RECOMMENDATIONS
The findings of this study therefore, bring to the limelight the need for the following recommendations:
1. With the perceived weak institutional setting, there is therefore the need to improve the institutional setting in order to boost external trade contribution to the economic as a whole. Even though Shipment Export has been found to contribute positively to the economy generally, whether in terms of contribution to gross domestic product, external reserve or external debt payment, one is tempted to say that more contributions would have been recorded with strong institutional setting.
2) Similarly, the poor transparency and corruption that appear to be endemic in our country call for concerted effort to make for an improved performance.
3) It has also been observed that information is grossly inadequate in the export trade. Hence, the need to improve the market information, especially in the areas of reporting and disclosure standards can hardly be over-emphasized. For instance, it appears disturbing that there seems to very wide gaps between what the Nigeria’s actual export receipts and the export targets. At best, this portends or lends further credence to the seeming over-orchestrated corrupt practices in high places in Nigeria.
4) Above all, there is need for policy makers to be consistent, both in terms of formulation and policy impelementation.

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