Economic Growth Nigeria
Nigeria’s economic aspirations have remained that of altering the structure of production and consumption patterns, diversifying the economic base and reducing dependence on oil, with the aim of putting the economy on a part of sustainable, all-inclusive and non-inflationary growth. The implication of this is that while rapid growth in output, as measured by the real gross domestic product (GDP), is important, the transformation of the various sectors of the economy is even more critical. This is consistent with the growth aspirations of most developing countries, as the structure of the economy is expected to change as growth progresses.
Successive governments in Nigeria have since independence in 1960, pursued the goal of structural changes without much success. The growth dynamics have been propelled by the existence and exploitation of natural resources and primary products. Initially, the agricultural sector, driven by the demand for food and cash crops production was at the centre of the growth process, contributing 54.
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7 per cent to the GDP during the 1960s. The second decade of independence saw the emergence of the oil industry as the main driver of growth.
Since then, the economy has mainly gyrated with the boom-burst cycles of the oil ndustry. Government expenditure outlays that are dependent on oil revenues have more or less dictated the pace of growth of the economy. Looking back, it is clear that the economy has not actually performed to its full potential particularly in the face of its rising population. 1 In general, economic growth and population growth rates are very close that the margin cannot induce the required structural transformation and economic diversification. The Nigerian economy has grossly underperformed relative to her enormous resource endowment and her peer nations.
It has the 6th largest gas reserves and the 8th largest crude oil reserves in the world. It is endowed in commercial quantities with about 37 solid mineral types and has a population of over 150 million persons. Yet economic performance has been rather weak and does not reflect these endowments. Compared with the emerging Asian these countries have countries, notably, Thailand, Malaysia , China, India and Indonesia that were far behind Nigeria in terms of GDP per capita in 1970, transformed their economies and are not only miles ahead of Nigeria, but are also major players on the global economic arena.
Indeed, Nigeria’s poor economic performance, particularly in the last forty years, is better illustrated when compared with China which now occupies an enviable position as the second largest economy in the world. In 1970, while Nigeria had a GDP per capita of US$233. 35 and was ranked 88th in the world, China was ranked 114th with a GDP per capita of US$111. 82. The major factors accounting for the relative decline of the country’s economic fortunes are easily identifiable as political instability, lack of focused and visionary leadership, economic mismanagement and corruption.
Prolonged period of military rule stifled economic and social progress, particularly in the three decades of 1970s to 1990s. During these years, resources were plundered, social values were debased, and unemployment rose astronomically with concomitant increase in crime rate. Living standards fell so low, to the extent that some of the best brains with the requisite skills to drive the developmental process left in droves to other nations, and are now making substantial contributions to the economic success of their host countries. 2
However, since 1999, the country returned to the path of civil democratic governance and has sustained uninterrupted democratic rule for a period of 11 years. This in itself is a great achievement and gives reason for hope in a country that has been burdened with almost three decades of military rule. It has provided an opportunity to arrest the decline of the past and provide the launch pad for the take-off into an era of sustainable and all-round economic development. The successive civilian administrations since 1999 have committed to tackling the daunting challenges.
Economic growth has risen substantially, with annual average of 7. 4 per cent in the last decade. But the growth has not been inclusive, broad-based and transformational. Agriculture and services have been the main drivers of growth. The implication of this trend is that economic growth in Nigeria has not resulted in the desired structural changes that would make manufacturing the engine of growth, create employment, promote technological development and induce poverty alleviation. Available data has put the national poverty level at 54. per cent. Similarly, there has been rising unemployment with the current level put at 19. 7 per cent by the National Bureau of Statistics (NBS). Furthermore, the country lags behind her peers in most human development indicators. For example, while China and Thailand are on the 5th and 22nd positions, respectively, on the 2009 Global Hunger Index, Nigeria was ranked 46th. This can be traced largely to the huge infrastructure deficit, rising insecurity, mass corruption and widespread poverty. 1. 2 Problem Statement
In the light of the poor performance of the economy since independence despite the huge mineral, material and human endowment, as well as the accelerating dynamics of the global economy, what are the prospects of the economy in the short-to-medium term? In other words, can the Nigerian economy move from the historical sluggish growth trends to a vibrant growth 3 path that can transform the structure of the economy and enable her to attainment the vision enunciated under Vision 20:2020 and launch her into the league of advanced economies?
Objectives and Structure of the Paper This lecture, therefore, seeks to examine the growth prospects for the Nigerian economy in the short-to-medium-term perspective, in the light of its relatively poor economic performance since independence and her abundant natural and human resources. Following this introduction, section 2 shares some thoughts on economic development, while section 3 reviews the Nigerian economy in perspective, through policy regimes to the nature and structure of the economy and performance trends.