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 Brothers which came with colonialism. These raw materials were refined into finished products and sold at maximum cost for 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 establishment of railways aided in the opening up of the economy and the further linking of the colonial economy with the metropolitan economies. Manufacturing industries were not established except to avoid the threat of competition which led to the establishment of Nigerian 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 ie 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 under development.
Some consequences of the colonial contact include; unequal exchange; dependence on exportation of a narrow range of cash crops and oil for foreign exchange earnings; creation of a pliant, dependent and unproductive bourgeoise; a double and dependent private sector; the domination of the economic by the multinational corporations and an instable state with independence, the new leaders of the Nigeria state were quickly overwhelmed with civil unrest culminating in a civil war. Thus there was 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 Nigerian 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 capita 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 Nigerian economy, hence, this study.
1.2 STATEMENT OF THE PROBLEM
Africa 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 object 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 government, these resources have not been optimally channeled to profitable investments to bring about maximum economic 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 1998, the country dropped to 146th position and has continued to drop. Today, Nigeria ranks among the 40 poorest countries.
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 Nigerian economy has experienced a downward slide. The oil boom filled the state coffers with windfall revenue in billions, but it also expands 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 that 500 billion dollars from oil revenue alone, and more than 30% of this 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 Nigerian 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 Nigerian 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 economic 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 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’s officials statistics that economic growth has not always been accompanied by a decline in poverty and unemployment.
Successive Nigerian government have 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 schemes experience one or more setbacks after initial implementation and die a guide and silent death.
OTHER SIMILAR ECONOMICS PROJECTS AND MATERIALS