Jake Okechukwu Effoduh.


There is a common Igbo proverb that says: No elephant is burdened by the weight of its tusks. The current economic problem in our nation is often lamented and cursed as unendurable, as if it is peculiar to the nation alone. Similarly, the fiscal measures introduced by the government are looked upon as hindrances or impediments, which a few may consider as irrelevant and unnecessary impositions. Yet, to look back at our growing up problems as if they are burdens, which we must cast off immediately, or run away from, is to be superficial and incapable of understanding ourselves, an offshoot of our character. The Nigerian economy, whether advancing or otherwise, is the weight that we must bear in our growth towards maturity, and in coming into full being as adults and as a nation. A mother does not complain of the weight of the child she carries on her back. The child is part of the process – the route towards her self-fulfillment.[3]

Conversely, Nigeria has witnessed significant and laudable economic progression from her amalgamation[4] till date. The indicators to buttress this fact are untold and can be gleaned from our advancement in different sectors including but not limited to the economic development in agriculture, manufacturing, transportation, foreign trade and investment, urbanization, communication and information technology and of course oil and gas. This paper seeks to unearth the progression of economic development of Nigeria from 1914 to 2014.

The emancipation of the Nigerian economy from the 1914 regions of Nigeria

Nigeria has always played a major economic role in the world. Being referred to as the largest black nation, The Nigerian economy is one of the most developed economies in Africa. [5]

In 1914, the British formally united the Niger area as the Colony and Protectorate of Nigeria. Administratively, Nigeria remained divided into the northern and southern provinces and Lagos Colony. The people of the South, with more interaction with the British and other Europeans due to the coastal economy, adopted Western education and developed a modern economy more rapidly than in the north. The regional differences in economy continued to be expressed in Nigeria’s political life as well. For instance, northern Nigeria did not outlaw slavery until 1936.[6]

Before the country was colonized by Britain, during the second half of the 19th century, the various nationality groups that currently make up Nigeria were largely an agricultural people. They were food self-sufficient and produced a variety of commodities that were exported overseas. During the 19th century, the abolition of the slave trade cleared the way for expansion of trade in agricultural produce from Africa to Europe, particularly palm oil from the West African coastal areas. The coastal enclave of Lagos became a British colony in 1861, a center for expansion of British trade, missions, and political influence. Late 19th century and early 20th century Lagos was also a center for educated West African elites who were to play prominent roles in the development of Pan-Africanism as well as Nigerian nationalism.

In northern Nigeria, Muslim reformer and empire builder Uthman dan Fodio established the Sokoto Caliphate in the early 19th century over the Hausa trading states. A predominantly Fulani aristocracy ruled over the majority of Hausa-speaking commoners, including both merchants and peasants. Expansion of agriculture, trade, and crafts made this area probably the most prosperous in tropical Africa in the 19th century, engaged in trade both to the coast and through the traditional routes over the desert to North Africa.

At the end of the 19th century, Britain began aggressive military expansion in the region, in part to counter competition from other Western countries and to break down monopolies which local traders had established in commodities such as palm-oil, cocoa, and peanuts. Britain declared a protectorate in the Niger delta in 1885 and sponsored creation of the Royal Niger Company in 1886. A protectorate was declared over northern Nigeria in 1900. Despite the loss of sovereignty, however, the strong political and cultural traditions of these societies initially enabled many to accommodate nominal British rule with little change in their way of life[7]

British colonial administrator joined together the nationality groups in 1914 into a larger economy for the benefit of British industrial classes. Under colonial rule, Nigeria remained an agricultural country, exporting raw materials to Britain and importing from it finished goods. Therein lay the argument to the origins of the dependence of Nigerian economy on commodity markets of the industrialized Western world for its foreign exchange. While the industrialization of the country was discouraged, rudimentary foundations for a modern Nigerian economy, however, were laid. Colonial economic policies shaped future independent Nigeria’s economy, particularly in marketing, labor supply, and investment.[8]

Starting in 1949, when Nigerian’s recently emergent Labour, commercial, and professional elites were first consulted by the British as part of a constitutional review, the peoples of Nigeria engaged in ongoing debate over the pressure of decolonization, independence, and modernization. Between 1951 and 1959, the major political parties played leading roles in unifying and locally mobilizing the economic elites.

The period of the colonial administration in Nigeria was punctuated by rather ad hoc attention to agricultural development. During the era, considerable emphasis was placed on research and extension services. The first notable activity of the era was the establishment of a botanical research station in Lagos by Sir Claude Mcdonald in 1893. This was followed by the acquisition of 10.4 kilometers of land in 1899 by the British Cotton Growing Association (BCGA) for experimental work on cotton and named the experimental area Moor Plantation in lbadan. In 1912, a Department of Agriculture was established in each of the then Southern and Northern Nigeria, but the activities of the Department were virtually suspended between 1913 and 1921 as a result of the First World War and its aftermath. From the early 1920s to the mid-1930s, there was a resurgence of activities and this period has been called the ‘Faulkner Strip Layout’ era in honour of the Director of Agriculture, Mr. 0.T. Faulkner, who devised a statistical design for experimental trials in green manuring, fertilizer projects, rotational cropping systems and livestock feeding. From the late 1930s to the mid-1940s, there were significant intensification and expansion of research activities, and extension and training programmes of the Agricultural Departments. Additional facilities for training of junior staff in agriculture were provided, as well as scholarships for agricultural students in Yaba Higher College and Imperial College of Tropical Agriculture in Trinidad[9].


The intensification of hostilities during the Second World War (1939-45) led to the slowing down of agricultural activities and the call to Departments of Agriculture to play increasing roles in the production of food for the army and civilians in the country and the Empire. Production of export crops like palm products and rubber which could not be obtained from Malaysia as a result of Japanese war activities in South-East Asia, and such food items as sugar, wheat, milk, eggs, vegetables, Irish potatoes and rice whose importation was prevented by naval blockade of the high seas increased. A special production section of the Department of Agriculture was set up to deal with the situation. On the research side, attention was devoted largely to the possibilities of evolving permanent systems of agriculture that were capable of replacing rotational bush-fallowing systems prevalent in the country and realizing the promises of mixed farming in the north. During this period, the WAIFOR (West African Institute for Oil Palm Research) in Benin was started and the research on cocoa was intensified at Moor Plantation, Owena near Ondo and at Onigambari near lbadan. Achievements of the period include the development of ‘Alien Cotton’ in the south; rice cultivation in Sokoto, Niger, llorin, Abeokuta Colony and Ondo provinces; the introduction of wheat cultivation in the more northern parts of the northern provinces; the expansion of production of such export crops as cocoa, oil palm and groundnut; development of agricultural implements as well as designing farm buildings; intensification of horticultural activities; the development of a marketing section of the Department; the extension of the Produce Inspection Service to cover all principal export crops; investigations into the possibilities for organized land settlement schemes; and investigations into the possibilities of irrigation in northern Nigeria.


The period of Internal Self Government from 1951 to 1960 began with the constitutional developments, which led to independence of the Regional Departments of Agriculture. The Federal Department of Agricultural Research was retained since constitutional provisions placed agricultural research on the concurrent legislative list, while extension work remained a regional responsibility. The research findings of the Federal Research Stations were to be transmitted through Regional ministries responsible for agriculture and natural resources. There was also the setting up, in 1955, of a Technical Committee of the Council of Natural Resources made up of Federal and Regional Ministers and officials for the formulation of national research programmes as well as the coordination of Federal and Regional research activities.[10]

Following World War II, in response to the growth of Nigerian nationalism and demands for independence, successive constitutions legislated by the British government moved Nigeria toward self-government on a representative and increasingly federal basis. By the middle of the 20th century, the great wave for independence was sweeping across Africa and Nigeria became independent in 1960[11]


The advancement of the Nigerian Economy after the 1960 Independence

The process of colonial rule and formal economic exploitation ended in 1960 but left Nigeria a relatively strong but undiversified economy. Thereafter, Nigerians were poised to remedy this defect and to build a self-sustaining Nigerian economy comprising agricultural, industrial, and service sectors[12]

From independence in 1960, the state took up the direction and planning of economic growth and development. Education was progressively expanded at all levels to reduce the rate of illiteracy and to provide the requisite skills and labor force for development. Infrastructure of roads and communication networks were constructed far beyond what was inherited from colonial rule. Hydroelectric dams were built to generate electricity. Secondary industries and automobile assembly plants were established to create more employment opportunities. Because of the paucity of native or local private capital, these activities were undertaken and financed by the government, often with foreign assistance from such countries as Britain and the United States.[13]

The problem of food shortages and imports was addressed in the late 1970s and early 1980s. In the late 1970s the military government of Olusegun Obasanjo embarked upon “Operation Feed the Nation.” His civilian successor, President Shehu Shagari, continued the program as the “Green Revolution.” Both programs encouraged Nigerians to grow more food, and urged unemployed urban dwellers to return to the rural areas to grow food crops. The government provided farmers with fertilizers and loans from the World Bank. The food situation stabilized, although Nigeria still imported food.[14]

Another relevant feature of the Nigerian economy was a series of abrupt changes in the government’s share of expenditures. As a percentage of Gross Domestic Product, national government expenditures rose from 9 percent in 1962 to 44 percent in 1979, but fell to 17 percent in 1988. The economic collapse in the late 1970s and early 1980s contributed to substantial discontent and conflict between ethnic communities and nationalities, adding to the political pressure to expel more than 2 million illegal workers[15] in early 1983 and May 1985.

The lower spending of the 1980s was partly the result of the Structural Adjustment Program (SAP) in effect from 1986 to 1990, first mooted by the International Monetary Fund and carried out under the auspices of the World Bank, which emphasized privatization, market prices, and reduced government expenditures. This program was based on the principle that, as GDP per capita falls; people demand relatively fewer social goods[16]and relatively more private goods, which tend to be essential items such as food, clothing, and shelter.[17]

From 1980, about 70% of the total working population was engaged in agriculture, producing yam, cassava, plantains, rice, beans, sugarcane, and citrus fruits for food, and cocoa, oil palm and kernel, groundnuts, rubber, cotton and timber as raw materials for local industries and for export.

The agricultural policy of both the Federal and State governments was to increase agricultural output substantially as a weapon against malnutrition and a means of improving the standard of living of every Nigerian. Much money was therefore spent in providing farmers with fertilizers, pesticides and other agricultural inputs at heavily subsidized prices. In addition, tractor hire services and land development schemes were expanded at government expense as an additional contribution to agricultural production.

The Nigerian Agricultural and Co-operative Bank, with headquarters in Kaduna, established grant loans (both directly and indirectly) to farmers. Priority was given to food crops, coastal-water fishery, poultry, beef, piggery and diary in various parts of the country. The new scheme, the Green Revolution, was launched for the promotion of agriculture. A National Council on Green Revolution was established in April 1980 to coordinate the activities of all ministries and organizations involved in agricultural production, processing, marketing and research. The Council is also charged with the responsibility of finding new ways that will facilitate the application of science to agricultural production in Nigeria so that the country can achieve self-sufficiency in agricultural production in the shortest possible time.[18]

The establishment of the iron and steel industry received priority attention in the nation’s bold march towards industrialization. About One Billion Naira at that time was allocated to this sector in the 3rd National Development Plan.[19] Considering the increasing demand for steel, the availability of iron ore and coal in the country, and the importance of the steel industry as a leading factor in rapid industrialization, the Federal Government decided to accelerate the establishment of suitable iron ore and steel plants in the country. In April 1971, a steel development authority was created amongst other things, to plan and develop iron projects in the country.

In order to ensure the effective implementation of the projects, the steel authority was further reorganized. Three other organizations – the National Steel Council, the Ajaokuta Steel Company Limited and the Associated Ores Mining Company Limited was created. In addition, the Delta Steel Company was established to operate the Aladja (Warri) direct reduction plant. Contracts were signed for the establishment of three rolling mills at Oshogbo, Jos and Katsina. The foundation stone for the Delta steel project was laid on March 30, 1979 while construction work was intensified on the infrastructural requirements for the Ajaokuta blast furnace steel plant. The plant went into full production by June 1983[20]. Heavy investment was planned in steel production. With Soviet assistance, a steel mill was developed at Ajaokuta in Kwara State, not far from Abuja. The most significant negative sign was the decline of industry associated with agriculture, but large scale irrigation projects were launched in the states of Borno, Kano, Sokoto, and Bauchi under World Bank auspices.


Great effort was also directed to liquefied natural gas, fertilizer and other petrochemical industries. Industrial development in other areas made steady progress. The manufacturing industry moved away from production of light consumer goods such as beer, soft drinks, cigarettes, shoes and textiles, to the substitution of a wide range of other formerly imported goods like salt, plastics, aluminum goods, garments, sugar, shoes, paper and cement.[21]

In the aspect of the economic development of Nigeria’s Industrial finance, the Federal Government in the bid to provide additional finance to industries in the country, established banks and financial institutions. An example of such financial establishments is the Nigerian Industrial Development Bank. Nigeria gave rise to the NIDB on January 22, 1964. The primary role of the NIDB is to produce medium and long term loans and sometimes equity investments to new and expanding industries. The minimum loan investment in any project by the NIDB was N50, 000. The bank’s resources stood at N275.4 Million as at December 31, 1980. Also at that date, the bank had sanctioned more than 451 investments amounting to over N360.5 million. There was also established, the Nigerian Bank for Commerce and Industry (NBCI).[22]

Industrialization, which had grown slowly after World War II through the civil war, boomed in the 1970s, despite many infrastructure constraints. Growth was particularly pronounced in the production and assembly of consumer goods, including vehicle assembly and the manufacture of soap and detergents, soft drinks, pharmaceuticals, beer, paint, and building materials. Furthermore, there was extensive investment in infrastructure from 1975 to 1980, and the number of parastatals jointly government and privately owned companies proliferated. The Nigerian Enterprises Promotion decrees of 1972 and 1977 further encouraged the growth of an indigenous middle class.

Mining played an increasing important role in the country’s economy. Among the minerals mined are iron, tin, columbite, limestone, coal and oil. The Nigerian Mining Corporation controls the mining of solid minerals in the country.

Education also expanded rapidly. At the start of the civil war, there were only five universities, but by 1975 the number had increased to thirteen, with seven more established over the next several years. In 1975 there were 53,000 university students. There were similar advances in primary and secondary school education, particularly in those northern states that had lagged behind[23].


The Oil Boom and the economic development of the Nigerian Oil[24]

By the late 1960s, oil had replaced cocoa, peanuts, and palm products as the country’s biggest foreign exchange earner. In 1971 Nigeria by then the world’s seventh-largest petroleum producer, became a member of the Organization of the Petroleum Exporting Countries (OPEC). The dramatic rise in world oil prices in 1974 caused a sudden flood of wealth. Much of the revenue was intended for investment to diversify the economy, but it also spurred inflation and underscored inequities in distribution. In 1975, production fell sharply as a result of the sudden decrease in world demand, and prices moved downward until late in the year when OPEC intervened to raise prices. Nigeria fully supported OPEC policies.[25]

In 1972 the government issued an indigenization decree, the first of a number of Nigerian Enterprises Promotion decrees, that barred aliens from investing in specified enterprises and reserved participation in certain trades to Nigerians. At the time, about 70 percent of commercial firms operating in Nigeria were foreign-owned. In 1975 the federal government bought 60 percent of the equity in the marketing operations of the major oil companies in Nigeria, but full nationalization was rejected as a means of furthering its program of indigenization.[26]

The oil boom which Nigeria experienced in the 1970’s helped the nation to recover rapidly from its civil war and at the same time gave great impetus to the government’s program of rapid industrialization. Many manufacturing industries sprang up and the economy experienced a rapid growth of about 8 percent per year that made Nigeria, by 1980, the largest economy in Africa.

The military regimes of Murtala Muhammad and Olusegun Obasanjo benefited from a tremendous influx of oil revenue that increased 350 percent between 1973 and 1974, when oil prices skyrocketed, to 1979, when the military stepped down. Foreign oil companies, such as Shell-BP, Exxon-Mobil, Chevron, Agip, and Texaco, operated in partnership with the government in the oil sector, the mainstay of Nigeria’s economy. The capital-intensive oil sector provides 95 percent of Nigeria’s foreign exchange earnings and about 65 percent of its budgetary revenues.[27]

A major feature of Nigeria’s economy in the 1980s, as in the 1970s, was its dependence on petroleum, which accounted for 87 percent of export receipts and 77 percent of the federal government’s revenue in 1988. Falling oil output and prices contributed to another noteworthy aspect of the economy in the 1980s—the decline in per capita real gross national product, which persisted until oil prices began to rise in 1990. Indeed, Gross National Product (GNP) per capita per year decreased 4.8 percent from 1980 to 1987, which led in 1989 to Nigeria’s classification by the World Bank as a low-income country[28] for the first time since the annual World Development Report was instituted in 1978. In 1989 the World Bank also declared Nigeria poor enough to be eligible[29] for concessional aid from an affiliate, the International Development Association (IDA).

By the late sixties and early seventies, Nigeria had attained a production level of over 2 million barrels of crude oil a day. Although production figures dropped in the eighties due to economic slump, 2004 saw a total rejuvenation of oil production to a record level of 2.5 million barrels per day. Development strategies were aimed at increasing production to 4 million barrels per day by the year 2010.

The petroleum industry is central to the Nigerian economic profile. It is the 12th largest producer of petroleum products in the world. The industry accounts for almost 80% of the GDP share and above 90% of the total exports. Owing to the surge in international oil prices during 2007- 2008, Nigeria managed an annual GDP of US$352.3 billion. The nation ranks 33 in the world in terms of GDP. The GDP per capita is US $2,400.[30]

Petroleum production and export play a dominant role in Nigeria’s economy and account for about 90% of her gross earnings. This dominant role has pushed agriculture, the traditional mainstay of the economy, from the early fifties and sixties, to the background.

Major Events in the history of the Nigerian Oil and Gas:
1908: Nigerian Bitumen Co. & British Colonial Petroleum commenced operations around Okitipupa.
1938: Shell D’ Arcy granted Exploration license to prospect for oil throughout Nigeria.
1955: Mobil Oil Corporation started operations in Nigeria.
1956: First successful well drilled at Oloibiri by Shell D’Arcy
1956: Changed name to Shell-BP Petroleum Development Company of Nigeria Limited.
1958: First shipment of oil from Nigeria.
1961: Shell’s Bonny Terminal was commissioned; Texaco Overseas started operations in Nigeria.
1962: Elf started operations in Nigeria. (As Safrap), Nigeria Agip Oil Company started operations in Nigeria
1963: Elf discovered Obagi field and Ubata gas field, Gulf’s first production
1965: Agip found its first oil at Ebocha, Phillips Oil Company started operations in Bendel State
1966: Elf started production in Rivers State with 12,000 b/d
1967: Phillips drilled its first well (Dry) at Osari –I, Phillips first oil discovery at Gilli-Gilli -I
1968: Mobil Producing Nigeria Limited) was formed, Gulf’s Terminal at Escravos was commissioned
1970: Mobil started production from 4 wells at Idoho Field, Agip started production, Department of Petroleum Resources Inspectorate started.
1971: Shell’s Forcados Terminal Commissioned, Mobil’s terminal at Qua Iboe commissioned
1973: First Participation Agreement; Federal Government acquires 35% shares in the Oil Companies, Ashland started PSC with then NNOC (NNPC), Pan Ocean Corporation drilled its first discovery well at Ogharefe –I
1974: Second Participation Agreement, Federal Government increases equity to 55%, Elf formally changed its name from “Safrap”, Ashland’s first oil discovery at OssuI

1975: First Oil lifting from Brass Terminal by Agip, DPR upgraded to Ministry of Petroleum Resources
1976: MPE renamed Ministry of Petroleum Resources (MPR), Pan Ocean commenced production via Shell-BP’s pipeline at a rate of 10,800 b/d
1977: Government established Nigerian National Petroleum Corporation (NNPC) by Decree 33, (NNOC & MPR extinguished).
1979: Third Participation Agreement (throughout NNPC) increases equity to 60% Fourth Participation Agreement; BP’s shareholding nationalized, leaving NNPC             with 80% equity and Shell 20% in the joint Venture. Changed name to Shell Petroleum Development Company of Nigeria (SPDC)
1984: Agreement consolidating NNPC/Shel1 joint Venture.
1986: Signing of Memorandum of Understanding (MOU)
1989: Fifth Participation Agreement; (NNPC=60%, Shell = 30%, Elf=5%, Agip=5%).
1991: Signing of Memorandum of Understanding & joint Venture Operating Agreement
1993: Production Sharing Contracts signed –SNEPCO, Sixth Participation Agreement; (NNPC=55%, Shell=30%, Elf= 10%, Agip=5%). The coming on-stream of Elf’s Odudu blend, offshore OML 100.
1995: SNEPCO starts drilling first Exploration well, NLNG’s Final Investment Decision             taken
1999: NLNG’s First shipment of Gas out of Bonny Terminal.
2000: NPDC/NAOC Service Contract signed
2001: Production of Okono offshore field.
2002: New PSCs agreement signed, Liberalization of the downstream oil sector, NNPC             commences retail outlet scheme[31]


National Economic Development Plans and Policies

In the pursuit to increase the material welfare and well-being of the citizens, various governments have over time embarked upon numerous developmental policies, plans, programmes and projects. Notable among these was the First National Development Plan (1962-1968), which was designed to put the economy on the path of accelerated growth by prioritizing agricultural and industrial development as well as training of high-level and intermediate manpower. [32]

The Second National Development Plan (1970-1974), through to the Third National Development Plan (1975-1980), were devoted primarily to reconstruct and rehabilitate infrastructure that were destroyed during the civil war years. This period witnessed massive investment of resources into the rehabilitation and construction of new infrastructural facilities[33]

There were over 2000 industrial establishments in the country. These contributed substantially to the Gross National Product. The industrial policy of the government to ban or restrict the importation of products which can be manufactured in the country will enhance the contribution of the manufacturing sector of the economy and reduce the nation’s reliance on external resources. This policy is already paying dividends judging by the number of goods now manufactured locally and the list of new industries being established or proposed.

The fourth National Development Plan was from 1981 – 1985 and it is of course the fourth of its kind by the Federal government since the country attained political independence in 1960. The Fourth National Development Plan, like the previous plans, is a deliberate instrument for harnessing the country’s national resources for the benefit of her people. To this end, the specific objectives of the Fourth Plan Period were as follows:

  1. Increase the real income of the average citizen;
  2. More even distribution of income among individuals and socio-economic groups;
  3. Reduction in the level of unemployment and underemployment;
  4. Increase in the supply of skilled manpower;
  5. Reduction of the dependence of the economy on a narrow range of activities;
  6. Balanced development – that is, the achievement of better balance in the development of the different sectors of the economy and the various geographical areas of the country;
  7. Increased participation by citizens in the ownership and management of productive enterprises;
  8. Greater self-reliance – that is, increased dependence on our own resources in seeking to achieve the various objectives of society. this also implies increased efforts to achieve optimum utilization of the country’s human and material resources;
  9. Development of technology;
  10. Increased productivity, and
  11. The promotion of a new national orientation conducive to greater discipline, better attitude to work and cleaner environment.[34]

The Fourth National Development Plan was designed to reduce the dependence of the economy on a narrow range of activities and broaden the economic base as well as develop the technological base. The economic downturn of the early 1980’s necessitated the implementation of Economic Stabilization Measures and later the Structural Adjustment Programme (SAP), which was aimed at creating a more market-friendly economy and to encourage private enterprise through the removal of cumbersome administrative mechanisms in economic management. The economic deregulation and liberalization policies of the late 1980’s and 1990’s had the goal of fostering effective allocation of scarce resources.

Furthermore, Nigeria’s Vision 2010 was aimed at “transforming the country and focusing it firmly on the path to becoming a developed nation by the year 2010”. According to the document, the private sector was expected to be very active, within a market-oriented, highly competitive, broad-based, private sector-driven development process. In addition, the return of democratic governance in the country in 1999, brought along with it the introduction of a series of reforms, aimed at redressing the distortions in the economy and restoring economic growth. The National Economic Empowerment and Development Strategy (NEEDS) of 2004 were a home-grown poverty reduction, value-reorientation and socio-economic development strategy for the country.

All plans, programmes and visions enumerated above, were to guarantee Nigeria’s economic development by altering the model of economic structure of production and consumption pattern, reduce dependence on oil, diversify the economic base, generate employment, and create a globally competitive and stable economy[35].

The Nigerian Centenary Economy

Nigeria is still classified as a mixed economy emerging market, and has already reached middle income status according to the World Bank,[36] with its abundant supply of natural resources, well-developed financial, legal, communications, transport sectors and stock exchange[37] which is the second largest in Africa. Nigeria is ranked 31st in the world in terms of GDP (PPP) as of 2011. Nigeria is the United States’ largest trading partner in sub-Saharan Africa and supplies a fifth of its oil (11% of oil imports). It has the seventh-largest trade surplus with the U.S. of any country worldwide. Nigeria is the 50th-largest export market for U.S. goods and the 14th-largest exporter of goods to the U.S. The United States is the country’s largest foreign investor. The International Monetary Fund (IMF) projected economic growth of 9% in 2008 and 8.3% in 2009.[38] The IMF further projected a 8% growth in the Nigerian economy in 2011[39]

According to Citigroup[40], Nigeria will get the highest average GDP growth in the world between the years 2010 and 2050. Nigeria is one of two countries from Africa among 11 Global Growth Generators countries.[41] Previously, economic development had been hindered by years of military rule, corruption, and mismanagement. The restoration of democracy and subsequent economic reforms has successfully put Nigeria back on track towards achieving its full economic potential. It is now the second largest economy in Africa (following South Africa), and the largest economy in the West Africa Region.[42]

Nigeria is the 12th largest producer of petroleum in the world and the 8th largest exporter, and has the 10th largest proven reserves.[43] Petroleum plays a large role in the Nigerian economy, accounting for 40% of GDP and 80% of Government earnings. However, agitation for better resource control in the Niger Delta, its main oil producing region, has led to disruptions in oil production and prevents the country from exporting at 100% capacity.[44]

The country has a highly developed financial services sector, with a mix of local and international banks, asset management companies, brokerage houses, insurance companies and brokers, private equity funds and investment banks.[45]

Nigeria also has a wide array of underexploited mineral resources which include natural gas, coal, bauxite, tantalite, gold, tin, iron ore, limestone, niobium, lead and zinc.[46] Despite huge deposits of these natural resources, the mining industry in Nigeria is still in its infancy.

Agriculture used to be the principal foreign exchange earner of Nigeria.[47] At one time, Nigeria was the world’s largest exporter of groundnuts, cocoa, and palm oil and a significant producer of coconuts, citrus fruits, maize, pearl millet, cassava, yams and sugar cane. About 60% of Nigerians are directly or indirectly in the agricultural sector, and Nigeria has vast areas of underutilized arable land.[48]

Nigeria also has a manufacturing industry, which includes leather and textiles (centered in Kano, Abeokuta, Onitsha, and Lagos), car manufacturing (for the French car manufacturer Peugeot as well as for the English truck manufacturer Bedford, now a subsidiary of General Motors), t-shirts, plastics and processed food.

Nigeria has one of the fastest growing telecommunications markets in the world, major emerging market operators (like MTN, Etisalat, Airtel and Globacom) basing their largest and most profitable centres in the country. The government has recently begun expanding this infrastructure to space based communications. Nigeria has a space satellite which is monitored at the Nigerian National Space Research and Development Agency Headquarters in Abuja. Four satellites have been launched by the Nigerian government into outer space. The Nigeriasat-1 was the first satellite to be built under the Nigerian government sponsorship. The satellite was launched from Russia on 27 September 2003. Nigeriasat-1 was part of the world-wide Disaster Monitoring Constellation System.[49] The primary objectives of the Nigeriasat-1 were: to give early warning signals of environmental disaster; to help detect and control desertification in the northern part of Nigeria; to assist in demographic planning; to establish the relationship between malaria vectors and the environment that breeds malaria and to give early warning signals on future outbreaks of meningitis using remote sensing technology; to provide the technology needed to bring education to all parts of the country through distant learning; and to aid in conflict resolution and border disputes by mapping out state and International borders.

NigeriaSat-2, Nigeria’s second satellite, was built as a high-resolution earth satellite by Surrey Space Technology Limited, a United Kingdom-based satellite technology company. It has 2.5-metre resolution panchromatic (very high resolution), 5-metre multispectral (high resolution, NIR red, green and red bands), and 32-metre multispectral (medium resolution, NIR red, green and red bands) antennas, with a ground receiving station in Abuja. The NigeriaSat-2 spacecraft alone was built at a cost estimated at over £35 million. This satellite was launched into orbit from a military base in China.[50]

NigComSat-1, a Nigerian satellite built in 2004, was Nigeria’s third satellite and Africa’s first communication satellite. It was launched on 13 May 2007, aboard a Chinese Long March 3B carrier rocket, from the Xichang Satellite Launch Centre in China. The spacecraft was operated by NigComSat and the Nigerian Space Agency, NASRDA. On 11 November 2008, NigComSat-1 failed in orbit after running out of power due to an anomaly in its solar array. It was based on the Chinese DFH-4 satellite bus, and carries a variety of transponders: 4 C-band; 14 Ku-band; 8 Ka-band; and 2 L-band. It was designed to provide coverage to many parts of Africa, and the Ka-band transponders would also cover Italy.

On 24 March 2009, the Nigerian Federal Ministry of Science and Technology, NigComSat Ltd. and CGWIC signed a further contract for the in-orbit delivery of the NigComSat-1R satellite. NigComSat-1R was also a DFH-4 satellite, and is expected to be delivered in the fourth quarter of 2011 as a replacement for the failed NigComSat-1.[51] On 19 December 2011, a new Nigerian communications satellite was launched into orbit by China in Xichang. The satellite according to Nigerian President Goodluck Jonathan which was paid for by the insurance policy on NigComSat-1 which de-orbited in 2009, would have a positive impact on national development in various sectors such as communications, internet services, health, agriculture, environmental protection and national security.[52]

The last time the Nigerian government rebased or re-benchmarked her Gross Domestic Product (GDP) was in 1990 despite the fact the rebasing of any country’s GDP comes up in every five-year period. The Statistician-General of the Federation and the Chief Executive Officer of the National Bureau of Statistics (NBS), Dr. Yemi Kale on April 6, 2014 released the official figures of the new rebased GDP of Nigeria. The highlights of Nigerian GDP after the re-benchmarking are as follows:

  •  Nigeria’s revised GDP is now N80.2 trillion ($509.9 billion). This dramatically increased the GDP by 89%.
  •  Nigeria is now ranked the 26th economy in the world and the largest economy in Africa as a result of the rebased GDP.
  •  The structure of the economy is now more diversified than before. Previously, the agriculture sector consisted of 33% and the service sector comprised of 26%. With the results of the new GDP, agriculture now represents 22% and the services sector which includes communication, Finance, Insurance, Arts and Entertainment, Real Estate, Public Administration, Education and Health Services account for 51% GDP.
  •  Other vital sectors on the re-based GDP results are Oil and Gas 15%, Manufacturing 6.7%, Telecoms 8.7% and Nollywood 1.2%.

The rebasing of Nigeria’s GDP was done to follow international norms because every country rebases its GDP figures every five years in order to adequately capture data on economic activities. For instance, Ghana rebased its GDP in 2010. Notably, the informal sector has contributed in projecting the country’s economy to be the largest in Africa by outdoing South African economy to the second position.[53]

The informal sector in Nigeria accounted for an estimated 57.9% of the country’s rebased GDP going by the pronouncement of Dauoda Toure, the United Nations resident coordinator and the representative of the United Nations Development Programs (UNDP) in Nigeria. According to Usman (2014), the informal sector contributed immensely to the services sector, which impacted 51% to the rebased GDP. In addition, call credit vendors, petty traders and unregulated economic activities in the informal sector formed part of the component of the services sector. The informal sector is rapidly increasing in Nigeria and its pivotal role in the economic development of Nigeria over the years has not been documented. The rebasing of the Nigerian’s GDP holistically surveyed the role of the informal sector in the development of the Nigerian economy for the first time. Further to this, the informal economy provides employment for the army of the unemployed youths thereby reducing poverty and assisting in the country’s GDP growth.[54]


Recommendations for the advancement of the Nigerian Economy

Nigeria has a bold vision of becoming one of the top 20 economies in the world by 2020, as outlined in its “Nigeria Vision 2020” strategy. This is very achieveable. Despite being described as a developing country, Nigeria is a powerhouse on the African continent by virtue of its size. Its vast oil wealth also promises much in the way of potential finance for development. How can this enormous potential be realized, and what policies are needed to achieve this ambitious dream of economic growth and prosperity? The goal of becoming a top-20 economy can only be achieved if Nigeria also makes the transition to a new economy based on knowledge, productivity, and innovation that will enable it to be competitive in a 21st century context. According to the World Bank, there are common factors that are associated with successful development. No country has attained development outside these common denominators. These are:

Economic growth: This has to do with poverty reduction. Experience shows that countries that have reduced poverty substantially and in a sustained manner are the ones that grow fastest. Successful development is predicated on a country having sustained periods of high per capita income growth. Mass poverty and economic development don’t go together.

Vibrant private sector: It has been established that private firms, including small and medium-sized businesses in rural nonfarm sectors, play a critical role in generating employment, particularly for the youth and the poor. This is where the contribution of the microfinance banks is needed. Undeveloped real sector coupled with mass unemployment are obstacles to development.

Empowerment: The citizenry must be empowered to contribute to development. Accordingly, every person should be able to enjoy good health and education. People should shape their own lives by being able to participate in the opportunities provided by economic development. People should have their voices heard about decisions affecting their own lives. Furthermore, there should be essential public services such as health, education and safe water. These are critical social services that should be provided equitably.

Good governance: Good governance is perhaps the most important factor in development. Without good governance, every other thing is in disarray. Good governance in both public and private sectors creates an environment where contracts are enforced and markets can operate efficiently. It ensures that basic infrastructures are provided, with adequate health, education and security. People can effectively participate in decisions that affect their lives.

Ownership: A nation’s development agenda must be homegrown. This ensures that there is widespread support for the programmes and reform measures that underpin it.

State collaborations: To achieve economic development in Nigeria, collaborative efforts with other countries may be beneficial to the mutual interest in economic advancement. For example, the President of Benin Republic and African Union (AU) President, Dr. Boni Yayi announced his intention to collaborate with Nigeria to ensure economic development of both countries through the provision basic infrastructural facilities.[55] The two countries were tie through Ife, Benin, Sokoto Caliphate, Kanu Kingdom and other affinities, and currently, more than 50 percent of Benin populations are Nigerians, hence the need to bring about the synergy to better the lots of the people as proposed by the President of Benin Republic. Collaborative action and partnership of States can help foster economic roles in development through mutual benefit investments and infrastructural expansion.[56]

Knowledge development: Knowledge has always been central to development. Traditionally, cultures that knew more than others were better able to adapt to their environments, survive, and thrive. In ancient times, knowledge was spread through the most serendipitous ways from migratory movements to religious pilgrimages, from wars to intertribal marriages and, thus, traveled across continents. Nowadays, the Internet has become the primary vehicle of knowledge dissemination almost the entire gamut of human history and knowledge is available in an instant and at little cost through the World Wide Web. Knowledge is becoming truly global, accessible, and democratic. The impacts of this paradigm shift are all around us. Countries such as the Republic of Korea, India, and the United States of America that can harness the power of new technologies nurture a cadre of knowledge workers that can push the productivity and innovation frontiers. Others that fail to do so remain mired in poverty. The global financial crisis has shown that countries can no longer rely on narrow and static paradigms of growth, such as Nigeria and its natural resource endowments. The era when natural resources dominated trade has given way to an era in which knowledge resources are paramount. Our world is changing rapidly and those who will be able to acquire, adapt, and utilize new ideas and innovations, regardless of who has invented them, will create tremendous wealth in the process. To achieve Vision 2020, Nigeria needs to move beyond the stop-start development patterns of an oil-based economy to create a stable and prosperous base for a 21st century society built on a critical mass of knowledge workers.

Not since the beginning of the Industrial Revolution has there been a more urgent time to rethink outdated development paradigms. How can Nigeria prepare for this century? What areas must its leaders focus on to achieve the vision of a new Nigeria?[57] Based on the foregoing, Nigeria must do the first thing first. We must start from the grassroots to transform the economy. We must improve on the already established pathway towards an advanced economic development.


From 1914 to 2014, the Nigerian economy has witnessed several phases in development. The economic status of the nation has been affected by political instability, exploitation and a myriad of other factors just like many other nations of the world but amidst such obstructions, Nigeria’s economy has evolved over the years and it is still on a journey to its rise in fiscal and industrial development. Attaining 100 years of existence since the 1914 amalgamation, Nigeria has course to celebrate its economic strength and diversity in several areas of development but at such a defining moment in Nigeria’s history, it is a strategic moment to redefine her economic policies, promote the expansion of investment, trade and agriculture as well as control natural resources to the fullness of their productivities and of course eliminate all forms of misuses and venality that hinders the maximum achievement to our economic expansion. With good governance and the best economic approaches, Nigeria will surely advance to the zenith of economic development

* Fellow and Assistant Director, Council on African Security and Development [CASADE]. This paper is also published as a chapter in the Book: ‘Nigeria: A Centenary of Constitutional Evolution 1914-2014’ (Nigerian Institute of Advanced Legal Studies) 2013. Pgs 974 – 1005.

[1] A tribe from the South- Eastern region of Nigeria and one of the major spoken languages in Nigeria.

[2] Akporobaro F.B.O and Emovon J.A Nigerian Proverbs: Meaning and Relevance Today Nigeria Magazine, Lagos, (1994), p. 113.

[3] Ibid. P. 114.

[4] The Northern and Southern protectorates of Nigeria amalgamated in 1914.

[5] The Nigerian Diaspora <http://www.nigeriandiaspora.com/diaspora.htm> accessed 4th May 2013.

[6] Centre for Global Development: Publications, Nigeria <http://www.cgdev.org/content/publications/detail/3223/> accessed on 4th May 2013.

[7] The Historian: Reference Page on Nigeria’s History <http://www.nigeriainfonet.com/nigeriahistory.htm> accessed on 4th May 2013.

[8] World Production History: Nigeria in the 19th Century <http://worldhistory.com/NigeriaHistoricalContext.html> Accessed April 12th 2013.

[9] Nwachukwu Chinweizu. N. “The History of Agriculture in Nigeria from the Colonial Era to the Present Day: Pointing all agricultural programmes. Posted to the web: 5/12/2006 8:19:27 PM <http://www.onlinenigeria.com/articles/ad.asp?blurb=268>

[10] Nwachukwu Chinweizu. N. “The History of Agriculture in igeria from the Colonial Era to the Present Day: Pointing all agricultural programmes. Posted to the web: 5/12/2006 8:19:27 PM <http://www.onlinenigeria.com/articles/ad.asp?blurb=268>

[11] J. A. Atanda and A.Y. Aliyu (Eds.) Proceedings of the National Conference on Nigeria Since Independence: Political Development, Zaria: Gaskiya Corporation, 1985.

[12] Nigeria: Political and Constitutional Development Since Independence <http://nm.onlinenigeria.com/templates/?a=138> Accessed on the 3rd of May 2013 at 11:00am

[13] UNDP, Country Profile: Nigeria. <http://hdrstats.undp.org/en/countries/profiles/NGA.html> accessed on 19 April 2013.

[14] World Bank Profile: Nigeria http://data.worldbank.org/country/nigeria

[15] Mostly from Ghana, Niger, Cameroon, and Chad

[16] Produced in the government sector

[17] M. Yusufu 1998 “Structural Adjustment Programme (SAP)” <http://kubanni.abu.edu.ng:8080/jspui/handle/123456789/749> accessed 20 April 2013.

[18] Tempo Newspaper, Vol. 13, No. 23, P. 8. 16 December, 1999.

[19] The National Development Plans are further discussed later in this chapter.

[20] National Assembly Department of Information & Public Affairs Welcome to Nigeria: Inter-Parliamentary Union spring Meetings, April 12 – 17, 1982. Third Press International, Lagos 1982. P 14- 15

[21] Ibid., P. 14 – 15.

[22] Ibid., P. 15.

[23] Ibid., P. 16.

[24] Oil was discovered in Nigeria in 1956 at Oloibiri in the Niger Delta after half a century of exploration. The discovery was made by Shell-BP, at the time the sole concessionaire. Nigeria joined the ranks of oil producers in 1958 when its first oil field came on stream producing 5,100 bpd. After 1960, exploration rights in onshore and offshore areas adjoining the Niger Delta were extended to other foreign companies. In 1965 the EA field was discovered by Shell in shallow water southeast of Warri. In 1970, the end of the Biafran war coincided with the rise in the world oil price, and Nigeria was able to reap instant riches from its oil production. Nigeria joined the Organisation of Petroleum Exporting Countries (OPEC) in 1971 and established the Nigerian National Petroleum Company (NNPC) in 1977; a state owned and controlled company which is a major player in both the upstream and downstream sectors. Following the discovery of crude oil by Shell D’Arcy Petroleum, pioneer production began in 1958 from the company’s oil field in Oloibiri in the Eastern Niger Delta. Source: <http://www.nnpcgroup.com/NNPCBusiness/BusinessInformation/OilGasinNigeria/IndustryHistory.aspx> Accessed on 4th of May 2013.

[25]   Irina Romanova 2007, Oil boom in Nigeria and its consequences for the country’s economic development, Munich, GRIN Publishing GmbH, <http://www.grin.com/en/e-book/67959/oil-boom-in-nigeria-and-its-consequences-for-the-country-s-economic-development>

[26] Oil and Gas, ‘African Development Bank’. (2005) Murrow Prints. p. 12.

[27] Brian Pinto Nigeria During and After the Oil Boom: A Policy Comparison with Indonesia Oxford Journals <http://wber.oxfordjournals.org/content/1/3/419.abstract> accessed 19 April 2013.

[28] Based on 1987 data.

[29] Along with countries such as Bangladesh, Ethiopia, Chad, and Mali.

[30] The Nigerian Petroleum Industry <http://www.economywatch.com/world_economy/nigeria/> accessed on 4th of April 2013.

[31] Nigerian National Petroleum Corporation, <http://www.nnpcgroup.com/NNPCBusiness/BusinessInformation/OilGasinNigeria/IndustryHistory.aspx> Accessed on 4th of May 2013.

[32] National Assembly Department of Information & Public Affairs Welcome to Nigeria: Inter-Parliamentary Union spring Meetings, April 12 – 17, 1982. Third Press International, Lagos 1982. P 11.

[33] Sanusi Lamido Sanuso, CON Governor Central Bank of Nigeria. Nigeria’s Economic Development Aspirations and the Leadership Question: Is there a nexus? A Paper delivered at the 2nd General Dr. Yakubu Gowon Distinguished Annual Lecture October 19, 2012 at page 3.

[34] National Assembly Department of Information & Public Affairs Welcome to Nigeria: Inter-Parliamentary Union spring Meetings, April 12 – 17, 1982. Third Press International, Lagos 1982. P 11 – 12

[35] Sanusi Lamido Sanuso, CON Governor Central Bank of Nigeria. Nigeria’s Economic Development Aspirations and the Leadership Question: Is there a nexus? A Paper delivered at the 2nd General Dr. Yakubu Gowon Distinguished Annual Lecture October 19, 2012.

[36] Onuah, Felix (29 December 2006). “Nigeria gives census result, avoids risky details“. Retrieved 23 November 2008.

[37] The Nigerian Stock Exchange.

[38] IMF Survey: “Nigeria Needs Sustained Reforms to Build on Success”. <www.Imf.org> Retrieved 21 November 2008. Aminu, Ayodele. <www.allAfrica.com> Africa: IMF Forecasts 9 Percent Growth for Nigeria (Page 1 of 1)

[39] Godwin, Atser. “The Punch: IMF predicts 9% GDP growth rate for Nigeria“. <www.Punchng.com> Retrieved 21 November 2008.

[40] Citigroup Inc. or Citi is an American multinational financial services corporation headquartered in Manhattan, New York City, New York, United States. Citigroup was formed from one of the world’s largest mergers in history by combining the banking giant Citicorp and financial conglomerate Travelers Group in October 1998 (announced on April 7, 1998). The year 2012 marks Citi’s 200th anniversary. It is currently the third largest bank holding company in the United States by assets. Citigroup has the world’s largest financial services network, spanning 140 countries with approximately 16,000 offices worldwide. The company currently employs approximately 260,000 staff around the world, which is down from 267,150 in 2010, according to Forbes. It also holds over 200 million customer accounts in more than 140 countries. It is one of the primary dealers in US Treasury securities. According to Forbes, at its height Citigroup used to be the largest company and bank in the world by total assets with 357,000 employees until the global financial crisis of 2008. Today it is ranked 20th in size under the Fortune 500 list. In comparison, JPMorgan Chase, which is ranked 16th on the Fortune 500, is now the largest bank in U.S. as of 2012. <www.citigroup.com>

[41] Odueme, Stella (9 May 2011). “RenCap projects 8% growth for Nigeria in 2011”. <www.Independentngonline.com> Retrieved 28 May 2011.

[42] FORGET THE BRICs: Citi’s Willem Buiter Presents The 11 “3G “Countries That Will Win The Future”. <www.businessinsider.com> 22 February 2011. Retrieved 31 May 2011.

[43] The country joined OPEC in 1971.

[44]Africa’s Ten Largest Economies in 2007“. <www.Clickafrique.com> 17 January 2010. Retrieved 21 December 2010.

[45] DeRouen, Karl R.; Paul Bellamy (2008). International Security and the United States: An Encyclopedia. Greenwood Publishing Group. p. 546. ISBN 0-275-99253-5. Retrieved 26 December 2008.

[46] Lewis, Peter (2007). Growing Apart: Oil, Politics, and Economic Change in Indonesia and Nigeria. University of Michigan Press. p. 168. ISBN 0-472-06980-2. Retrieved 26 December 2008.

[47] The New York Times Guide to Essential Knowledge: A Desk Reference for the Curious Mind. Macmillan. 2007. p. 1093. ISBN 0-312-37659-6. Retrieved 26 December 2008.

[48] Ake, Claude (1996). Democracy and Development in Africa. Brookings Institution Press. p. 48. ISBN 0-8157-0220-5. Retrieved 26 December 2008.

[49] Levy, Patricia (2004). Nigeria. Marshall Cavendish. p. 14. ISBN 0-7614-1703-6. Retrieved 26 December 2008.

[50] Ibid.

[51]Nigeria Launches Satellite In China“. <www.AfricanSpotlight.com> Retrieved 10 March 2012.

[52] Ibid

[53] Awojobi, Ayakpat and Adisa, ‘Rebased Nigerian Gross Domestic Product: The Role of the Informal Sector in the development of the Nigerian Economy’ International Journal of Education and Research Vol. 2 No 7. (July 2014) P. 302. Accessed 1 January 2015.

[54] Ibid.

[55] “Economic Development: Benin to collaborate Nigeria” from the official website of the Cross Rivers state government.<http://www.crossriverstate.gov.ng/index.php?option=com_content&view=article&id=1543:economic-development-benin-to-collaborate-nigeria&catid=6&Itemid=286> accessed at 1:46pm on the 16th of April 2013

[56] “Our vision is to bring together the two countries by linking them through railways, airport, seaports and road networks to promote the desired economic activities in the area, the political will is already there and I am optimistic that we will achieve that” he said.

[57] Radwan. I, Pellegrinii. G. Knowledge, Productivity and Innovation in Nigeria: Creating a new Economy. Accessed at <https://openknowledge.worldbank.org/bitstream/handle/10986/2424/536450PUB0Inno101Official0use0Only1.txt?sequence=2>25th of May 2013.