Economy of Nigeria

The economy of Nigeria is in its structure comparable with that of many African countries, but all is there on a higher scale: labor (Nigeria is the country more populated Africa), natural resources (he is the 1st African producer of Pétrole), the Corruption (the classification 2007 of Transparency International of the index of perception of corruption classified it 147e on 179 evaluated countries).

Only sound Gross domestic product (GDP) per capita locates it in the African average. It remains besides largely in lower part of the level of before independence. Approximately two thirds of the population live in lower part of the threshold of absolute Pauvreté (1 $ per day), against 43 % in 1985. In spite of that, and thanks to its human resources and its wealth of natural resources, the Nigeria is classified with the row of 2nd sub-Saharan power, behind the South Africa. With approximately 125 billion dollars per annum, its GDP (in Purchasing power parity) is equivalent to about half of that of the Suisse. The essence of the economic activity is carried out in the coastal area, in the south of the country.

History

The essence of the economic development of Nigeria occurred in the south of the country, where the first European colonizers and more particularly British settled starting from the medium 16th-beginning 17th centuries, within the framework of the general competition for the control of the trade in the Atlantique. To compete with the Dutch in the trade of the slaves, the Company off the Royal Adventurers obtained a charter of monopoly for West Africa as of 1660, then was replaced in 1672 by the Royal African Company . After the progressive elimination of the Dutchmen at the 18th century and the fall of Napoleon Bonaparte in 1815, the the United Kingdom remained the only dominant power of the area.

The trade of the slaves was the essential cause of the fatal conflicts which ensanglantèrent the south of the country during the three centuries when it was practiced. About the middle of the 19th century, it became more interesting for the British to find new outlets for their manufactured goods, like ensuring their seizure on the trade of the Palm oil and the Ivoire, with the requirement by imposing their capacity directly on the chiefs for the coastal tribes of what will become Nigeria.

In 1850, the principal British bases were located in the delta from Niger and in Lagos, but a movement of development of the back-country was undertaken so in particular thwarting the possible territorial claims of the other colonial powers. Lagos became a colony of the Crown in 1861 to allow a better fight against the illegal traffic of slaves from now on, to suppress the internal conflicts between Yoruba S, and to prevent that the French do not seize any. The new occupants supported the development in the years which followed commercial cultures and, at the time of its accession to the Indépendance in 1960, the country was the first agricultural power of the African continent.

Years of bad management, primarily ascribable with the corruption generalized as with the incompetence of the military capacities which will follow one another the orders of the country, will make that at the beginning of the 21e century the country does not have any more a significant presence on the worldwide markets. From now on, oil constituting the essence of exports and the public revenue, the general economic situation is strongly dependant on world rates of the crude.

However since the arrival of the reforming civil government of Olusegun Obasanjo in 1999 and the increase of the courses of the crude in 2004, the country knows a vigorous growth of its GDP, (of 4 with 6 % per annum).

Natural resources

Oil exploitation

The first signs of interest for the exploitation of the oil resources Nigerians date from the beginning of the 20th century, at the moment when oil becomes a strategic resource of first order. British private companies thus started to prospect with the four corners of the Empire (Trinidad, the Eastern Indies, Burma) in order to diversify the production sites, primarily localized with the the Middle East.

It is in 1906 that John Simon Bergheim, after having repurchased all the licenses of exploration of the area, convainquit the colonial government of Nigeria to grant a user license its company, Nigeria Bitumen Corporation (NBC). This monopoly in fact was protected by the colonial government, which rewrote the law Nigerian on the mining of 1907 to protect the interests from NBC and also provides him a loan allowing him to finance its research. With died of Bergheim, in 1912, more than one about fifteen well had been dug close to the delta of the Niger, close to 143 000 pounds Sterling absorbed, and this without result. The bursting of the First World War a little later marked the end of the oil ambitions of the area for the twenty next years.

The company Shell of Arcy obtained a new license of exploration for the whole of Nigeria in 1937. After an interruption during the Second world war, exploration began again, without success, until the successive discovery of the first two commercially viable layers, in the Actual positions of Bayelsa and Rivers, in 1956. After the construction of a Pipeline since the layers until Port Harcourt, the first oil cargo liner left the country the February 17th 1958.

In 1959, the single concession granted at Shell was re-examined with the fall, making it possible other companies to launch out in the adventure Nigerian and to increase the capacity of exploration. Shell lost about half of its concessions of the delta of Niger, keeping only the most promising sectors. The country became independent one year later, in 1960, and joined the Organization of the oil exporting countries in 1971.

The Pétrole (2,2 million barrels per day, 5th rank OPEC in 2003) generates close to 95 % of the Export S, 70 % of the tax incomes and a third of the GDP Nigerian (it should be noted that these figures go back to before the increase from the courses begun in 2004). The estimated level of the reserves would be of 35 billion barrels according to OPEC, but regularly progressed these last years thanks to the offshore oil rig prospection.

Leger and low in sulfur (65 % of extracted oil has a API Indice ( American Petroleum Institute ) equal to or higher than 35°, the principal products of export being Forcados (API 31°) and Bonny Light (API 37°)), the rough Nigerian is a product of choice for the production of fuel. The courses are in fact less subjected to the seasonal risks of the market than is to it for example the heavy crude Saoudi, whose consumption increases in winter. It should however be noted that because of an infrastructure of stripped plaster production and a potential of quasi-non-existent refining, the country is an importer Net of fuel. A general strike took place besides during the first weeks of October 2004 to protest against the increase in the prices of the fuel, the government in the long term trying to remove all the subsidies of the prices of the gasoline (those costing nearly a billion dollar per annum the state).

The essence of the production is in small layers (less 50 million barrels) in the zone of the delta of Niger, but new reserves was recently discovered in layers offshore oil rigs in the Golfe of Guinea. 95 % of the production in fact via companies in Joint venture, most important of them, dominated by Shell, ensuring until 50 % of the total national production. The export of Natural gas started in 1999 and the country plans to completely eliminate burning ( flaring ) since 2008.

There exist also reserves of coal (primarily bituminous lignite and coals), most important of the continent, but the entirety of the weak national production is absorbed by the local market. Because of obsolescence of the equipment, growth of the production costs and passage of the consumers to other energy sources, this one passed between 1990 and 1994 of more than 77 000 tons with less 13 000 tons, to stabilize itself into 2004 in the neighborhoods of 6 000 tonnes/an.

At the mineral level, Nigeria has in its basement of appreciable layers columbite (an ore of Niobium), Fer, Zinc, tin, Or, stone with Chaux and Marbre). The sector remains however underdeveloped, the main part of the mining investments being absorbed by the oil sector: in fact, only niobium, tin and the stone with lime are exploited in a commercial way. Layers of Uranium are also suspectés, but not developed.

Until the imposition of an agreement of interconnection between Nitel and private operators by the NCC in May 2001, it was frequent that the subscribers of a given operator can contact only the other subscribers of the same service. In spite of notable progress, it still happens that calls do not arrive to destination.

Internet

The absence of a national Dorsale Internet a long time handicapped the development of the access to Internet, connections between national sites initially having to pass by already overloaded international lines. In the zones not profiting from their own supplier of access, connection by modem was to be done by the means of call long distance. Lastly, the low quality of the fixed network of Nitel strongly contributed to the development of the WiFi. Financed by the recent flight of the courses of the crude, this handing-over comes primarily in reward of the efforts from the country to rationalize the management of the debt (victim of the great projects of the years 1980), and to accompany the reform program installation by the Obasanjo government. Thanks to this handing-over, the rate of total debt of the country will fall from 75 to 44% of the GDP (or of 140% to 107% of the nonoil GDP).

The programme of adjustment of the Funds international currency (FMI)

In 1986, the oil prices crumble and the barrel reached nine dollars. The attempts to leave the crisis by an increased control on the economy fail and, the Federation is at the edge of the suspension of payment. The general Ibrahim Babangida then makes agreement of renegotiation and cover of the debt (contracted in the medium term at the time of the booms of 1973 and 1979) with the the IMF. The country engages in a plan of structural adjustment (NOT) whose posted objective is to reduce the dependence of the economy to the oil sector.

The program of adjustment is connected with a handing-over flat supplements operation of the State Nigerian by methods at the same time monetarists (liberalization of the exchange by the creation of a second money market, control of the money Supply, rise of interest rates) and liberal (lowers customs tariffs, privatizations).

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