AFRICAS ECONOMIC DEVELOPMENT A case study of Nigeria

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AFRICAS ECONOMIC DEVELOPMENT A case study of
Nigeria

• A case study of Nigeria

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(No Transcript)
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Economic Indicators

• Gross Domestic Product (GDP) (nominal and real)
  (for the entire nation or per individual)
  
• Population
• Labor Force, Employment, Unemployment rate,
  Participation, Average Weekly earnings
  
• Public Expenditure, Revenues, Budget Surplus and
  Deficit, National Debt
  
• Personal Income, Expenditure, Savings
• International Trade Exports, Imports, Balance of
  Payments
  
• Economic Determinants
• Industry and Manufacturing
• Agriculture
• Mining and drilling
• Investment and Banking

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Nigeria
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Economic Reality

• Overview
• Nigeria has a dual economy with a modern segment
  dependent on oil earnings, overlaid by a
  traditional agricultural and trading economy.
  
• At independence in 1960 agriculture accounted
  for well over half of GDP, and was the main
  source of export earnings and public revenue.
  
• The oil sector, which emerged in the 1960's and
  was firmly established during the 1970's, is now
  of overwhelming importance to the point of
  over-dependence it provides 20 of GDP, 95 of
  foreign exchange earnings, and about 65 of
  budgetary revenues.

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Economic Reality (Cont.)

• AGRICULTURE
• Nigeria ranks nineteenth worldwide and first in
  Africa in farm output.
  
• Agriculture has suffered from years of
  mismanagement, inconsistent and poorly conceived
  government policies, and the lack of basic
  infrastructure. Still, the sector accounts for
  over 26.8 of GDP and two-thirds of employment.
• Nigeria is no longer a major exporter of cocoa,
  groundnuts (peanuts), rubber, and palm oil.
  
• Agriculture has failed to keep pace with
  Nigerias rapid population growth, so that the
  country, which once exported food, now relies on
  imports to sustain itself

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Industry

• Nigeria ranks 44th worldwide and third in Africa
  in factory output.
  
• Nigeria is a member of the Organization of
  Petroleum Exporting Countries (OPEC), and in
  mid-2001 its crude oil production was averaging
  around 2.2 million barrels (350,000 m³) per day.
• Manufacturing is dominated by light consumer
  goods and is oriented towards import
  substitution.
  
• Industry is still vulnerable because of the high
  proportion of imports among its inputs.
  

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Mining and Oil

• Nigeria used to be one of the largest producers
  of tin in the world, with production based around
  the highland district of Jos.
  
• Production collapsed from an average of 10,000
  tonnes per year in the 1970s to 300 tonnes in
  1995. (European spelling tonne) A unit of weight
  equal to 1,000 kilograms, or 2,204.6 pounds.)
• There are 65 sites in Nigeria where gold has been
  located. By mid-1999, field appraisals had
  recommended nine as being ready for exploitation.
  
• Deposits of uranium, lead, zinc, tungsten and
  gold are not yet exploited.
  
• The petroleum sector is the mainstay of the
  economy
  

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Economic Reform

• The Obasanjo government supports "private-sector"
  led, "market oriented" economic growth and has
  begun extensive economic reform efforts.
  
• To meet market demand the government incurs large
  losses importing gasoline to sell at subsidized
  prices.

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Reform Comparison

• Ecuador
• Ecuador candidate Correa to redraw private oil
  contracts
  
• "Many of the oil contracts are a true entrapment
  for the country. Of every five barrels of oil
  that the multinationals produce, they leave only
  one for the state and take four... That is
  absolutely unacceptable. We're going to revise
  and renegotiate the contracts."

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Reform Comparison (Cont.)

• Correa has pledged to shut down the U.S. military
  base in Manta, where 400 U.S. soldiers are
  stationed as part of the Eloy Alfaro Air Base
  though he has also jokingly stated that We can
  negotiate with the U.S. about a base in Manta, if
  they let us put a military base in Miami, if
  there is no problem, well accept".

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Way Forward

• African Union
• The AU has only 2 of the world's international
  trade.
  
• Initiatives to boost economy.