The Crisis Of The Nigerian Economy

The "Curse of the Black Gold" is what they call it. The greasy money-making liquid can also cause the undoing of countries. Oil companies like Shell sometimes make as much money as the country they do business in. The hazards that come with extracting oil is understated while the rewards are often praised. To the companies, we are not important, it is the money we carry in our pockets that they care about. Shell, a billion-dollar making oil company, is slowly gaining a lot of recognition in countries as it is causing a lot of corruption due to several accidents as well as its influence on global warming. The company is most known for its fracking practices as well as its impact on Nigerian villages.

Niger, home of the free flowing Niger River is a Sub-Saharan country. Sadly it is an extremely poor country. With part of the country desert and less than 3% open for crop use. The present economic situation is bleak at best. Yet, the vibrant tradition and history of this country live today in its tribes and its people even through all of its adversities. From severe droughts to military coups to a dysfunctional government to the culture has stayed strong.

In 1958, oil was first discovered in Nigeria. The discovery has led to the transition from agriculture-based economy to that of oil economy. One would believe that a country that produces a numerous amount of oil used to support the world with energy would have improved domestic infrastructures and economic development. Unfortunately, this is not the case in Nigeria. Nigeria has suffered since the discovery of oil and is still suffering till this day. Not only has it created conflicts between other nations and Nigeria but it has also divided the country into groups, which has fueled civil wars and tension between the government and the people. This is why the topic is a geopolitical event but before trying to understand how it is geopolitical, one should understand what geopolitics is.

Nigeria has a population of around 180 million, making it the most populous country in Africa. Nigeria is located in a region with tropical climate and that can grow variety of crops. With their numerous resources and growing technology they have been able to have positive economic advancement. Nigeria has had improvements in five of the ten economic freedoms. This includes Freedom of corruption, labor freedom, and management of government spending ("Nigeria." Economy: Population, GDP, Inflation, Business, Trade, FDI, Corruption.). Nevertheless these large improvements in their economy has not brought human development, where most Nigerians live under the poverty line. This paper will focus on why Nigeria has not been able to use their economic prosperity in the sector of human development, this includes standard of living, health, safety, and basic necessity one needs to live a stable life. We will compare it to the state of Ghana whose economy has also flourished but has been success in human development.

The author accurately stated throughout the article that the government is removing the subsidy as act of corruption. This was shown firstly, by moving the audience towards the direction that the promises deliberated during presidential campaign were not sincere. This therefore, allows the reader to understand that the Nigeria population was not adequately or not educated about this matter. Secondly, the authors provides figures of the refineries’ lack of capacity which showcases the years of mismanagement and corruption which has led to the incapacity to refine oil in the country. Thirdly, it emphasizes that the removal of such subsidy has taken place during the worst time ever given to all the instability in the North and moreover with the energy problems that Nigeria are currently facing. However, in my opinion despite all these facts stated by the author, I strongly believe this article has only one side of the story. In other articles which were investigated for the purpose of this analysis such as it talks about the massive problem they are with smuggling (Madukwe,2012), in addition, it explains how this massive amount of money which is being used to acquire

In cases like Nigeria, where a vast amount of petroleum was discovered, there is an export of about 12 million barrels of oil a day from Nigeria. The effects have

An archetypal example of an oil state and primary exporting country, Nigeria is the largest oil exporter in Africa and the world’s tenth largest oil producer (Pyagbara 2007: 1). As of 2010, crude oil and petroleum gas accounted for approximately 80% of the country’s overall exports, totaling over $50.3 billion in revenues the next year (Pyagbara 2007: 2). Despite maintaining a lucrative resource that could arguably catalyze momentum towards economic development, poverty plagues Nigeria and continues to rise despite efforts to forge positive, developmental changes. In fact, areas showing the largest amounts of oil like the Niger Delta happen to be the country’s most economically marginalized region. A significant impetus of these tumultuous changes has been multinational oil corporations like Shell that have been extracting oil in Nigeria since 1956. This paper seeks to examine Nigerian development in the face of oil extraction and how MNCs such as Shell have played a role in the country’s development. I will argue that MNCs, specifically Shell, have had an adverse effect on development within Nigeria as a result of oil extraction and the establishment of dependency on oil, both of which are amplified by the deep-rooted intrastate issues present despite MNC intervention.

These attacks on the oil companies are serious enough for the government to ‘reward’ the violence by holding discussions with these warlords. The reason for this is that the country is a petro-state. This means that the country’s economy relies heavily on oil revenue, about 50 per cent of the GDP, 95 per cent foreign exchange earnings and 80 per cent of its budgetary revenues. This came about after the civil war, beforehand Nigeria was a relatively small producer of oil, but after it became a global producer of oil, 5th biggest producer in the group OPEC. Because of this civil war, oil companies such a Shell have had to form close partnerships with the Nigerian government, and indeed military dictatorships in order to exploit the abundance of oil in the country. Very little money from the oil production has gone into the communities where the oil is

During the 1950’s vast reserves of petroleum were discovered in Nigeria, making oil a crucial aspect of the Nigerian economy. Foreign oil companies have then since dominated the oil exploration, drilling, and shipping and 87% of the government’s revenue comes from oil production. Shell Oil decided to enter Nigeria in 1937 through a joint venture with the government owned Nigerian National Petroleum Corporation (55%), Total E&P Nigeria Ltd (10%), and Agip Oil Company Limited (5%). Shell Oil controls approximately 60% of the domestic oil market and operates majority of its facilities in the Delta region of Nigeria. The Ogoni region is a highly oil rich area in the Delta region that has been greatly affected by the environmental

Nigeria is the 7th world largest oil producer and is a major player in the world energy market. Oil and gas is Nigeria’s main source of revenue. It accounts for about 40% of the Gross Domestic Product and 70% of government revenues (Lawal 2004). Crude oil was first discovered in 1956 by Shell British Petroleum in a small village called Oloibiri present day Bayelsa State. Two years later oil in larger quantities was discovered in Ogoni.

Agricultural production, which used to be the mainstay of Nigerian economy, has been declining as results of crude oil discovery and subsequent increase in production and exportation of crude oil (Edo (2013). The discovery of crude oil and appreciation of oil price in the World market some years ago leads Nigerian government to abandon all other means of revenue generations, including agriculture, just to depend solely on crude oil revenue to finance most of her budgets. However, crude oil exports are no longer sustaining the economy due to the current downturn in crude oil price. For instance, the Nigerian government generated lots of revenues from crude oil exports, but majority of her populations are still under the poverty

There is a causality between lack of economic diversification and high levels of vulnerability. This is the case in Nigeria as the oil sector contributes more than half to the country’s GDP, yet, it only provides employment to les than 5 percent of the country’s teeming population. Over reliance on oil does not destroy Delta’s ecosystem, but also

Nigeria is the most populated country in Africa and the seventh most populated country in the world. It has the 20th largest economy in the world with a $500 billion to $1 trillion Gross Domestic Product (GDP) with an emerging market and large oil and limestone natural resources. This is significant knowing that limestone is a mineral source that is used in most products you use every day including paper, bottles, paint, building supplies, and food. (WIKIPEDIA, 2015)

Currency devaluation and fuel subsidy removal are policies that are phenomena to the Nigerian economic environment. This research study identifies that the implementation of the policies has further caused more challenges in the pursuit for economic development than remedy to alleviate the crisis.

Nigeria and indeed almost all the African countries are now facing an unprecedented debt crisis never known in the history of the continent. The rationale for raising external loan has always been to bridge the domestic resource gap in order to accelerate economic development. This is because nations just like individuals need loans to augment domestic resources. Nigeria decides to borrow in order to finance specific projects. As at today, Nigeria Local and international debt stands at US $60 billion according to The Vice President Yemi Osinbajo. Nigeria debt did not just happen overnight because during some of the successive governments and administration since Nigeria independent from the periods of General Obasanjo’s regime (1976-1979) till Babangida and Abacha regimes (1985-1998), surprisingly, caused the nation’s ‘boast’ to begin to fade. Then, it was discovered that to keep moving, Nigeria had to take foreign loans. In no time, Nigeria was caught up in a crippling foreign debt crisis that besides compromising its economic progress, political stability, social dignity and cultural integrity, also dealt a debilitating blow to the Nigerian masses. Because of the pains and sufferings they inflicted as a result of implementation of the World Bank IMF policies.