Nigeria at 49: Economic Recovery in Sight?

The Independence of Nigeria is characterized by so many factors which were born out of agitations from our leaders. It had before long lingered on in the minds of our leaders who saw Nigeria ripe for self-government. Prior to her independence in 1960, the economy was typified by the dominance of exports and commercial activities.

The contribution of agriculture after independence continued as the mainstay of the economy. In spite of fluctuations in world prices, agriculture contributed about 65 per cent to GDP and represented almost 70 per cent of total exports. Agriculture provided the foreign exchange that was utilized in importing raw materials and capital goods. The peasant farmers produced enough to feed the entire population.

The various Marketing Boards generated much revenue, the surplus of which was used by government to develop the basic infrastructure needed for long term development. Maximizing the benefits of the export-led development strategy was the main thrust of policy, which was the source of the economy to GDP, of about 63 percent in 1960, declined to 34 per cent in 1988, not for the reason that the industrial sector increased its share but due to neglect of the agricultural sector. It was consequently not unanticipated that by 1975, the economy had become a lattice importer of basic food items.

It was glaring that the boost in industry and manufacturing from 1978 to 1988 was due to activities in the mining sub-sector, especially petroleum. Capital formation in the economy has not been satisfactory. It was therefore not surprising that by 1975, the economy had become a net importer of basic food items. The apparent increase in industry and manufacturing from 1978 to 1988 was due to activities in the mining sub-sector, especially petroleum. Capital formation in the economy has not been satisfactory

Gross domestic investment as a per cent age of GDP, which was 16.3 per cent and 22.8 per cent in the periods 1965-73 and 1973-80 respectively, decreased to almost 14 per cent in 1980-88 and increased to 18.2 per cent in 1991 -98. Gross National Saving has been low and mostly characterized by public savings, especially during the period 1973-80.

Import Substitution Industrialisation (ISI) strategy was adopted. Consequently, various consumer items, which were hitherto imported, were produced domestically. Protective measures like tariffs, quotas, were in place to ensure that domestic industries were allowed to grow.

In the short run, jobs were created, although the industries were to some extent unnecessarily protected by government. Generally, the finished products of the protected industries were less competitive compared with their foreign counterparts. Of course, that did not decrease domestic demand for them. However, Nigerian industrialists did not take advantage of the various protective measures put in place.

The economy never experienced double-digit inflation during the 1960s. By 1976, however, the inflation rate stood at 23 per cent. It decreased to 11.8 per cent in 1979 and jumped to 41 percent and 72.8 per cent in 1989 and 1995, respectively. By 1998, the inflation rate had, however, reduced to 9.5 per cent from 29.0 per cent in 1996.

Unemployment rates averaged almost 5 per cent for the period 1976-1998. However, the statistics especially on unemployment must be interpreted with caution. Most job seekers do not use the lab our exchanges, apart from the inherent distortions in the country's lab our market. Based on some basic indicators, it appears that the economy performed well during the year’s immediately after independence and into the oil boom years. However, in the 1980s the economy was in a recession.

The on-going economic reform programme by President Musa Yar’Adua, (Vision 20:2020) is an attempt to put the economy on a recovery path with minimal inflation. Lately, the president has stepped up plans to realize his dreams.