Nigerian Economy

The economy of Nigeria historically was based on agriculture, and more than half of the workforce is still engaged in farming. 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.

Petroleum is the leading mineral produced in Nigeria; it is found in the Niger delta, in the bights of Benin and Biafra, and on the Bakassi peninsula along the Cameroon-Nigeria border, a disputed area where the two countries have been involved in clashes. (In 2002 the International Court of Justice awarded the peninsula to Cameroon, but the decision has yet to be implemented.) Petroleum production on an appreciable scale began in the late 1950s, and by the early 1970s it was by far the leading earner of foreign exchange.

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.

Industry in Nigeria includes the processing of agricultural goods and the manufacture of textiles, footwear, soap, tobacco products, paper, cement, fertilizer, chemicals, and steel. Fishing and forestry are also important. In addition, traditional woven goods, pottery, metal objects, and carved wood and ivory are produced. Nigeria's road and rail systems are constructed basically along north-south lines; the country's chief seaports are Lagos, Warri, Port Harcourt, and Calabar. 

Except when oil prices are low, Nigeria generally earns more from exports than it spends on imports. Other important exports include cocoa, rubber, and palm products. The main imports are machinery, chemicals and refined petroleum products, motor vehicles, manufactured consumer goods, and food. The leading trade partners are Great Britain, the United States, Japan, the Netherlands, and France.

Nevertheless since 1908 Oil has become the bedrock of Nigeria's economic development, accounting for more than 80 per cent of its foreign exchange earnings. Nigeria's oil reserves are the ninth largest in the world. In 1987, crude oil reserves totaled 16 billion barrels.

It is projected that by 1997, the reserves could rise to 20 billion barrels. Nigeria is a member of OPEC (the Organization of Petroleum Exporting Countries. A Nigerian has been elected Secretary General of OPEC for a record sixth term.

Nigeria also has vast largely unexplored natural gas reserves, the world's fifth largest. Dozens of European and American businesses are currently exploring joint venture businesses in gas production. But Nigerians themselves now realize the danger of over-dependence on the oil sector. In the past few years, deliberate attempts have been made to concentrate on agriculture and encourage manufacturing. Various schemes have been established to assist farmers at every level, resulting in impressive cutbacks in Nigeria's food import bills while changes in Nigeria's industrial policy are encouraging foreign participation in manufacturing.