Nature Of our Economics Today

Nigeria is a middle income, mixed economy and emerging market, with expansionary service, communications, and entertainment sectors. She is ranked 30th in the world terms of GDP as of 2011, and its emergent, though currently unperformed, manufacturing sector is the third-largest on the continent, producing a large proportion goods and services for the West African sub-region. Although much has been made of its status as a major exporter of oil, Nig produces only about 2.7% of the world’s supply. To put oil revenues in perspective: a estimated export rate with a projected sales price of $65 per barrel in 2011, anticipated revenue from petroleum is about $52.2 billion. This account for less than I of official GDP figures (and drops to 10% when the informal economy is included in calculations). Therefore, though the petroleum sector is important, it remains in facts part of the country’s overall vibrant and diversified economy. The largely subsist agricultural sector has not kept up with rapid population growth, and Nigeria, once  net exporter of food, now imports a large quantity of its food products.

Overview of the Nigerian

Nigeria’s economy is struggling to use the country’s vast wealth in petroleum resource displace the crushing poverty that affects about 57% of its population. Economists of the coexistence of vast wealth in natural resources and extreme personal developing countries like Nigeria as the “resource curse”. Although “resource more widely understood to mean an abundance of natural resources which fuels offer corruption resulting in a violent competition for the resource by the citizens of the
Nigeria’s exports of oil and natural gas—at time of peak prices—have enabled

A longer-term economic development programmer is the United Nations (UN) — censored National Millennium Goals for Nigeria. Under the programme which covers the yrs from 2000 to 2015. Nigeria is committed to achieve a wide range of ambitious objectives involving poverty reduction, education, gender equality, health, the environment, nd international development cooperation. In an update released in 2004, the UN found that Nigeria was making progress advanced efforts to provide universal primary education, protect the environment, and develop a global development partnership. However, the country lagged behind on the goals of eliminating extreme poverty and hunger, reducing thud arid maternal mortality, and combating diseases such as human immunodeficiency reacquired immune deficiency syndrome (HIV/AIDS) and malaria. A prerequisite for achieving many of these worthwhile objectives is curtailing corruption.

Nigeria ranks twenty fifth worldwide and first in Africa in farm output.

Agriculture has suffered from years of mismanagement, inconsistent and poorly conceived government policies, neglect and the lack of basic infrastructure. Still, the sector accounts for over 26.8% of GDP and two-thirds of employment. Nigeria is no longer a major exporter of cocoa, groundnuts (peanuts), rubber, and palm oil. Cocoa production, motIy from obsolete varieties and overage trees, is stagnant at around 180,000 tons annually; 25 years ago it was 300,00 tons. An even more dramatic decline in groundnut and palm oil production also has taken place. Nigeria was once the biggest poultry producer in Africa, corporate poultry and other sectors.

Fisheries are poorly managed. Most critical for the country’s future, Nigeria’s land tenure system does not encourage long-term investment in technology or modern production methods and does not inspire the availability of rural credit.

Agricultural products include cassava (tapioca), corn, cocoa, millet, palm oil, peanuts, rice, rubber sorghum, and yams. The agricultural sector suffers from extremely low productivity, reflecting reliance on antiquated methods. Although overall agricultural production rose by 28% during the 1 990s, per capita output rose by only 8.5% during the same decade. Agriculture has failed to keep pace with Nigeria’s rapid population growth, so that the country, which once exported food, now relies on imports to sustain itself.



Nigeria ranks 44th worldwide and third in Africa in factory output.

The oil boom of the I 970s led Nigeria to neglect its strong agricultural and manufacturing bases in favour of an unhealthy dependence on crude oil. In 2000, oil and exports accounted for more than 98% of export earnings and about 83% of federal government revenue. New oil wealth, and decline of other economic sectors, led to massive migration to the cities and widespread poverty I 980s followed. By 2000, per capital income had plunged to about one-quarter of its mid- I 970s high, below the i at independence. Along with the endemic malaise of Nigeria’s non-oil sectors, the economy continues to witness massive growth of “informal sector” economic activities, estimated by some to be as high as 75% of the total economy.

The United Kingdom is Nigeria’s largest trading partner followed by the United States. Although the trade balance overwhelmingly favours Nigeria, thanks to oil exports, a large portion of U.S. exports to Nigeria is believed to enter the country outside of the Nigeria government’s official statistics, due to importers seeking to avoid Nigeria’s excessive tariffs.

Oil dependency, and the attraction to the generation of great wealth through government contracts, led to other economic distortions. The country’s high propensity to import means roughly 80% of government expenditures is recycled into foreign exchange. Cheap consumer imports, resulting from a chronically overvalued Naira, coupled witl excessively high domestic production costs due in part to erratic electricity and fuel supply pushed down utilization of industrial capacity to less than 30%. Many more Nigeria factor would have closed except for relatively low labour costs (10%— 15%). Domesuc manufacturers, especially pharmaceuticals and textiles, have lost their ability to compete traditional regional markets. However, there are signs that some manufacturers have begun to improve competitiveness.

Nigeria ranks 63rd worldwide and fifth in Africa services’ output. Low power and telecom has crippled the growth of this sector.

- Since undergoing severe distress in the mid- I 990s, Nigeria’s banking sector has ed significant growth over the last few years as new banks enter the financial market.

monetary policies implemented by the Central Bank of Nigeria to absorb excess Naira liquidity in the economy has made life more difficult for banks, some of whom engage
currency arbitrage (round-tippig) activities that generally fall outside legal banking mechanisms. Private sector-led economic growth remains stymied by the high cost of doing biness In Nigeria, including the need to duplicate essential infrastructure, the threat of [dassociated need for security counter measures, the lack of effective due process, dnon-transparent economic decision making, especially in government contracting. As of ZT, 29% of Nigerians in urban areas did not own bank accounts. While corrupt practices endemic, they are generally less flagrant than during military rule, and there are signs of nvement. Meanwhile, since 1999 the Nigerian Stock Exchange has enjoyed strong, although equity as a means to foster corporate growth remains underutilized ia’s private sector.