ECONOMIC DEVELOPMENT OF NIGERIA

Introduction

1.1 Background And Need Of The Study

Before independence, the economy of Nigeria was mainly involved in the extraction of raw materials like cocoa, groundnut, rubber, timber and palm oil from the hinterland to the metropolitan countries of Europe. This process was financed by the commercial and trading houses like the United African Company (UAC), John Holt and Miller Brother which came with colonialism. These raw materials were refined into finished products and sold at maximum cost of profit.

The encouragement of cash crops and the other activities which aided the transfer of profits to the countries of Europe and North America finally incorporated the economy into the global capitalist economy with the colonial economy of Nigeria being dependent and incapable of internal expression.

The opening of Tin mining in Jos and Coal mining in Enugu, and the established of railways aided in the opening up of the economy and the further linking of the colonial economy with the metropolitan economics.

Manufacturing industries were not established except to avoid of threat of competition which led to the establishment of Nigeria breweries in 1949 in Lagos. The colonial authorities did not encourage rapid industrialization, but they stimulated the production of primary products with the type of educational system put in place by the colonialists, they were able to train out an elite of workers and business who took over the state.

It is significant to note that the capitalist mode of production introduced by the colonialists did not completely erode the pre-capitalist mode of production i.e. The peasant mode in which the farmers owned their own land to produce primary products for consumption.

But this contact with the forces of Western imperialism not only distorted and reconfigured Nigeria’s economy, it also ensured its structural articulation into the international division of labour and paved the way for its further underdevelopment. Some consequences of the colonial contact include:

Unequal exchange; dependent on exportation of a narrow range of cash crops and oil form foreign exchange earnings, creation of a plant, dependent and unproductive bourgeoisie; a double and dependent private sector; the domination of the economic by the multinational corporations and an instable state with civil unrest culminating in a civil war. This there was a no major change in the structure of the Nigeria economy in the years leading to the 1970s. Reeling from the devastation of the civil war, the Nigeria economy experienced an unprecedented boom in the 1970s. But by 1980s, the country experienced economic problems.

In the fifty years since independence, successive government have grappled with the recurring issues of unemployment, low per capital income, increasingly lower standards of living of the majority of Nigerians, increasing poverty levels across the nation as some among the many indicators of the underdevelopment of the Nigeria economy, hence this study.

1.2 Statement Of The Problem

African as a whole is a continent that is played, with economic instability and underdevelopment for instance, it is documented that the number of poor people in African increased significantly in the last few years. While there may be pockets of rich people in African countries, the vast majority of the people live in abject poverty.

Nigeria in particular is a nation that is endowed with a multitude of resources, but due to gross mismanagement, profligate spending and adverse policies of various governments, these resource have not been optimally channeled to profitable investment to bring about maximum economics benefits.

It is estimated that about 70% of Nigerians live on less than $1 a day. The UNDP (United Development program) Human Development Index (HDI) ranked, Nigeria as 142nd with an HDI of 0.400 among the 174 countries listed in 1997, by 1995. The country dropped to 146th position and has continued to drop.

As a matter of fact, the HDI economic and social indicative recently observed that Nigeria is one of the poorest countries in the world. The incident of poverty in Nigeria has been high and on the increase. Data from the federal office of statistics (FOS) on poverty profile in Nigeria showed that the incident of poverty rose from 28.1% in 1980 to 70.2% in 2003.

Since the oil boom of the 1970s, the Nigeria economy has experienced a downward slide. The oil boom filled the state coffers opportunities for unbridled corruption.

The country’s real productive based (agriculture) was displaced, so was entrepreneurship. Today 90% of the country’s earnings come from oil which makes the economy susceptible to the vagaries of the international oil market.

Since independence in 1960, Nigeria is supposed to have realized more than 500 billion dollars from oil revenue alone, and more than 30% of that amount is unaccounted for Nigeria is the sixth largest producer of oil in OPEC (Organization of Petroleum Exporting Countries). It is also regarded as the second largest economy in the world yet the per capital income is less than the world averages.

1.3 Objectives Of The Study

The objectives of this study is to examine the structure and the state of the Nigeria economy with a view to

1. Determine whether the Nigerian economy is developed or underdeveloped.
2. Determine the level of economic development achieved in the Nigeria economy during the period under consideration.
3. Examine the indicators of economic development such as the Gross Domestic Product (GDP), Consumer Price Index (CPI) and inflation etc in Nigeria during the period under consideration.
4. Examine the development of the Nigerian economy by sector such as agriculture, industry etc during the period under study.
5. Examine the factors influencing the economy development of Nigeria.
6. Determine how government policies such as privatization has influenced the economic development of Nigeria
7. Examine measures that could enhance economic development in Nigeria.

1.4 Research Questions

The following research question was formulated to guide this study:

1. Is Nigerian economy developed or underdeveloped?
2. Of what level has the Nigerian economy developed during the period under consideration?
3. What is the indicator of economic development?
4. What is the development achieved in Nigeria by different sectors of the Nigerian economy?
5. What are the factors that influence economic development in Nigeria?
6. How has privatization policies influenced economic development in Nigeria.
7. What are the measures that can enhance economic development?

1.5 Significance Of The Questions

This study is structured towards highlighting the benefits of achieving a stable and growing economy in a nation like Nigeria. For many years, Nigeria has been bedeviled with unemployment and poverty. Economic growth which is supposed to be the solution to the problems of poverty and unemployment appears not to be so in Nigeria. Nigeria official’s statistics that economic growth has not always been accompanied by a decline in poverty and unemployment.

Successive Nigerian government has sought to combat this trend with various policies and schemes but the inherent deficiencies in the policy implementation and continuation culture in Nigeria has proven too tough for government to handle. Thus most policies and scheme experiences one or more setbacks after initial implementation and die a guide and silent death.

As the most populous black national economic development and independence, Nigeria cannot afford to remain as a nation with huge external debt, almost non-existent balance of trade, high poverty levels and unemployment among others.

It becomes imperative that any effort towards a revitalization of the Nigerian economy towards sustainable development is to be applauded. With globalization and the opening of world markets, every national economy.

To achieve, this, Nigeria must first diagnose the problem ailing the economy, and then set forth policies in a process of reengineering the economy. A study like this becomes relevant in achieving the above.