The Modern Nigerian Economy
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The Modern Nigerian Economy
Nigeria is located on the west coast of Africa and is the most populous black country in the world, bordering the North Atlantic Ocean, between Benin and Cameroon. Nigeria covers 356,668 sq miles and is about the same size as California, Nevada and Utah combined. Nigeria is diverse in people and culture. Oil-rich Nigeria, long stunted by political instability, corruption, inadequate infrastructure, and poor management, is undertaking some reforms under a new reform-minded administration. Nigerias former military rulers failed to diversify the economy away from its overdependence on the capital-intensive oil sector, which provides 20% of Gross Domestic Product, 95% of foreign exchange earnings, and about 65% of budgetary revenues. The largely subsistence agricultural sector has failed to keep up with rapid population growth. Nigeria is Africas most populous country; and the country, once a large exporter of food, must now import food. The modern Nigerian economy is greatly dependent upon trade and its changing from an agricultural export industry to a more competitive and prosperous oil exportation industry, thus affecting Nigerias economic, financial and banking structures.
Most countries economies are immensely dependent upon trade. Nigerias economy is no different. Nigeria is based off of imports such as; machinery and transport equipment, manufactured goods, food and live animals, animal and vegetable oils and fats, mineral fuel lubricants, crude materials, beverages, tobacco, chemicals, and textiles. Nigerias income is supported by the exportation of goods such as; petroleum and oil, cocoa beans, rubber, palm kernels, cotton, yam, hides and skins. Nigeria is dependent on the exportation of petroleum, without this export Nigeria wouldnt have much of an economy. Petroleum is the leading mineral produced in Nigeria. The growing oil industry attracted many to urban centers, to the detriment of the agricultural sector. In the 1980s a decline in world oil prices prompted the government to bolster the agricultural sector. Nonetheless, both refinery capacity and agriculture have not kept pace with population growth, forcing the nation to import refined petroleum products and food. Other minerals extracted include tin, limestone, columbite, coal, low-grade iron ore, and gold.The chief crops are sorghum, millet, soybeans, peanuts, cotton, corn, yams, rice, palm products, cacao, and rubber. In addition, poultry, goats, sheep, and cattle are raised. Crop production has fallen in recent years and Nigeria must now import food. Nigeria has a trade agreement with Britain (the largest), USA, Germany, France, the Netherlands, and Brazil to gain imported commodities and exports to countries including the USA, Germany, France, Italy, Brazil, Spain, and India.
The economy of Nigeria, historically, was based on agriculture and its economy is still greatly impacted by agriculture for exportation and also for local use. Nigerias agricultural industry provides employment for a large amount of the countrys population and more than half the workforce is engaged in farming. The discovery of oil resources in the country significantly affected the agriculture industry of Nigeria in negative ways, an industry which used to be Nigerias main commerce. This sector has suffered a relative decline because of the dominance of oil in the economy, but it still accounts for 33% of GDP (Gross Domestic Product). As petroleum comes to the forefront of the Nigerian economy, agriculture is slowly deteriorating in its influence on the mainstay of the Nigerias modernizing economy.
Finally, banking and finance plays an essential role in any successful and prosperous countrys economy. Nigeria is relatively behind in this area, but is gradually increasing in knowledge to improve their financial system. In 1892 Nigerias first