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Table of Contents
2 NIGERIA IN BRIEF
2.2.1 Geographical History of Nigeria
2.2.2 Brief on Government and Politics
2.2.3 Brief on Bilateral and Foreign Relation
2.2.4 Brief History of Nigeria Economy
2.2.5 Brief on Nigeria Key Sectors
2.2.6 Brief on Infrastructural Development in Nigeria
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2.2.1 Geographical History of Nigeria
Nigeria is a country in West Africa. Nigeria shares land borders with the Republic of Benin inthe west, Chad and Cameroon in the east, and Niger in the north. Its coast lies on the Gulf ofGuinea in the south and it borders Lake Chad to the northeast. Abuja, the capital city of the Table
2.2.1 - Map of West Africa(Source: http://unowa.unmissions.org/Default.aspx?tabid=793)
Federal Republic of Nigeria replaced the former capital city, Lagos, in December 1991, because
of its more central location, among other reasons. Noted geographical features in Nigeria include
the Adamawa highlands, Mambilla Plateau, Jos Plateau, Obudu Plateau, the Niger River, River
Benue and Niger Delta. The country's geographic coordinates are 1000N 800E. Nigeria has
been experiencing a population explosion for at least the last 50 years due to very high fertility
rates, quadrupling its population during this time. Nigeria has become the 6th most populated
country in the world with a population of 167 million people (UNFPA, world population report,
2011).
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Table 2.2.2 - Map of Nigeria exhibiting its 36 states and federal capital territory (Source: http://en.wikipedia.org/wiki/Nigeria)
2.2.2 Brief on Government and Politics
Nigeria is a heterogeneous national entity and a federation comprising currently thirty-six states
(36) and one (1) Federal Capital Territory, which are further sub-divided into 774 Local
Government Areas (LGAs). Lagos is the largest city in sub-Saharan Africa, with a population of
over 8 million in its urban area alone.
A series of constitutions after World War II granted Nigeria greater autonomy; independence
came in 1960 after the British influence and control. Following nearly 16 years of military rule, a
new constitution was adopted in 1999, and a peaceful transition to civilian government was
completed.
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Table 2.2.3 - Population Density in Nigeria (Source: http://en.wikipedia.org/wiki/Nigeria)
Nigeria continues to experience longstanding ethnic and religious tensions. Nigeria is currently
experiencing its longest period of civilian rule since independence. The general elections of April
2007 marked the first civilian-to-civilian transfer of power in the country's history. In April
2011, the Independent National Electoral Commission (INEC) organized legislative,
gubernatorial, and presidential elections. President Jonathan captured 59% of the national vote,
beating his main rival, Muhammadu Buhari of the Congress for Progressive Change (CPC), who
won 32%. While imperfect, the elections were considered Nigerias most successful since its
return to multiparty democracy in 1999, and reversed a downward trajectory of successively
flawed election processes. President Jonathan was sworn in on May 29, 2011.
Nigeria federalism is modeled after the United States, with executive power exercised by the
president and with overtones of the Westminster System model in the composition and
management of the upper and lower houses of the bicameral legislature. The president presides
as both Head of State and head of the national executive and is elected by popular vote to a
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maximum of two four-year terms. The president's power is checked by the Senates and House of
Representatives, which are combined in a bicameral body called the National Assembly.
Nigeria, is composed of over 250 ethnic groups, the most populous and politically influential
group include Hausa and Fulani 29%, Yoruba 21%, Igbo (Ibo) 18%, Ijaw 10%, Kanuri 4%,
Ibibio 3.5%, Tiv and Idoma 2.5%. Nigeria has no any religious domineering, although the
Muslim totaled 50%, Christian 40%, indigenous beliefs 10%. The major languages spoken in
Nigeria are Hausa, Igbo, Yoruba, Fulfulde, Kanuri, Ibibio and English as the official language.
Table 2.2.4 - Linguistic map of Nigeria relating with Cameroon and Benin (Source: http://www.faculty.fairfield.edu/Nigeria)
2.2.3 Brief on Bilateral and Foreign Relation
After gaining independence in 1960, Nigeria made the liberation and restoration of the dignity of
Africa the centerpiece of its foreign policy and played a leading role in the fight against the
apartheid regime in South Africa. One notable exception to the African focus of Nigeria's foreign
policy was the close relationship the country enjoyed with Israel throughout the 1960s, with the
latter country sponsoring and overseeing the construction of Nigeria's parliament buildings.
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Nigeria is currently in better foreign relations due to its current state of democracy though a
fledging one. Currently, Nigeria is a member of about Fifty-Nine (59) foreign organizations
including the AfDB, AU and the UN. Nigeria is the largest contributor to ADF in cumulative
terms ahead of Japan and the United States. Also, the country is the largest shareholder in the
ADB ahead of Japan and the United States. The country is a member of the African Union and
sits on that organization's Peace and Security Council. Since 1960 Nigeria has been a member of
the UN and also joined the Commonwealth of Nations the same year; however they were briefly
suspended between 1995 and 1999.
2.2.4 Brief History of Nigeria Economy
Nigeria is classified as a mixed economy emerging market, and has already reached middle
income status according to the World Bank, with its abundant supply of natural resources, well-
developed financial, legal, communications, transport sectors and stock exchange (the Nigerian
Stock Exchange), which is the second largest in Africa
The Gross Domestic Product (GDP) in Nigeria expanded 7.7 percent in the second quarter of
2011 over the same quarter, previous year. Historically, from 2005 until 2010, Nigeria's average
quarterly GDP Growth was 6.71 percent reaching a historical high of 8.29 percent in December
of 2010 and a record low of 4.50 percent in March of 2009. Nigeria is one of the most developedeconomies in Africa. The petroleum industry provides 95% of foreign trade earnings and about
80% of budget revenues. Yet, agriculture is the main source of revenue for two-thirds of the
population. Still, more than 50% of Nigerians live in poverty with corruption and poor
infrastructure as the main obstacles for future sustainable development.
The Oil-rich Country began pursuing economic reforms in 2008 after been hobbled by political
instability, corruption, inadequate infrastructure, and poor macroeconomic management and
failure by the past leaders to diversify the economy away from its overdependence on the capital-
intensive oil sector. The restorations of democracy and subsequent economic reforms have
successfully put Nigeria back on track towards achieving its full economic potential. It is now
the second largest economy in Africa (following South Africa), and the largest economy in the
West Africa Region.
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During the oil boom of the 1970s, Nigeria accumulated a significant foreign debt to finance
major infrastructural investments. With the fall of oil prices during the 1980s oil glut Nigeria
struggled to keep up with its loan payments and eventually defaulted on its principal debt
repayments, limiting repayment to the interest portion of the loans. Arrears and penalty interest
accumulated on the unpaid principal which increased the size of the debt. However, after
negotiations by the Nigeria authorities, in October 2005 Nigeria and its Paris Club creditors
reached an agreement in which Nigeria repurchased its debt at a discount of approximately 60%.
Nigeria used part of its oil profits to pay the residual 40%, freeing up at least $1.15 billion
annually for poverty reduction programmes. Nigeria made history in April 2006 by becoming the
first African Country to completely pay off its debt (estimated $30 billion) owed to the Paris
Club.
Since 2008 the government has begun to show the political will to implement the market-
oriented reforms urged by the IMF, such as modernizing the banking system, Monetary Policy
Rate (MPR) tightening and curbing inflation by blocking excessive wage demands, and resolving
regional disputes over the distribution of earnings from the oil industry. GDP rose strongly in
2007-10 because of increased oil exports and high global crude prices in 2010. Nigeria is
projected by the Citigroup to get the highest average GDP growth in the world between 2010
2050. Nigeria is one of the two countries from Africa among 11 Global Growth Generators
countries.
2.2.5 Brief on Nigeria Key Sectors
Nigeria is the 12th largest producer of petroleum in the world and the 8th largest exporter, and
has the 10th largest proven reserves. The country joined OPEC in 1971. Oil was first discovered
in Nigeria in 1953 in Oloibiri in the Niger Delta (PENGASSAN, 1978). Since the oil discoveries,
it has become the dominant factor in Nigerias economy. Nigeria is recognized as a country with
the most known reserves of petroleum and gas in Sub-Saharan Africa. Petroleum has long
become the most important aspect of the national economy, accounting for more than half of
GDP, about 95 percent of government revenues, and over 90 percent of exports. Since 2003,
Nigeria has embarked on an ambitious agenda of reforms aimed at enhancing governance in
public financial management (PFM), banking services, power and telecommunications
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infrastructures, and transparency and accountability in the oil sector. The reforms have led to
strong economic growth during 200307; (AfDB African Economic Outlook, Nigeria, 2011).
Despite these reforms, Nigeria remains a poor country with more than half of its population
living below the poverty line and 35 percent living in conditions of extreme poverty (National
Planning Commission 2007). Gross domestic product (GDP) per capita has remained almost
unchanged (still below US$1,200) and there are few signs of multiplier effects from the oil
industry. Public infrastructure has either declined severely or is in a state of collapse, and the
unreliability of critical public utilities such as electricity is a primary reason why most
manufacturing firms have closed (Borodo 2009).
Nigeria has one of the fastest growing telecommunications markets in the world, major emerging
market operators (like MTN, Etisalat, Zain and Globacom) basing their largest and most
profitable centers in the country. The government has recently begun expanding this
infrastructure to space based communications. Nigeria has a space satellite which is monitored at
the Nigerian National Space Research and Development Agency Headquarters in Abuja.
The country has a highly developed financial services sector, with a mix of local and
international banks, asset management companies, brokerage houses, insurance companies and
brokers, private equity funds and investment banks.
Nigeria also has a wide array of underexploited mineral resources which include natural gas,
coal, bauxite, tantalite, gold, tin, iron ore, limestone, niobium, lead and zinc. Despite huge
deposits of these natural resources, the mining industry in Nigeria is still in its infancy.
Agriculture used to be the principal foreign exchange earner of Nigeria. At one time, Nigeria was
the world's largest exporter of groundnuts, cocoa, and palm oil and a significant producer of
coconuts, citrus fruits, maize, pearl millet, cassava, yams and sugar cane. About 60% of
Nigerians work in the agricultural sector, and Nigeria has vast areas of underutilized arable land.
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Table 2.2.4-Distribution of Vegetation in Nigeria (Source: fairfield.edu/Country Study/Nigeria)
It also has a manufacturing industry which includes leather and textiles (centred Kano,
Abeokuta, Onitsha, and Lagos), car manufacturing (for the French car manufacturer Peugeot as
well as for the English truck manufacturer Bedford, now a subsidiary of General Motors), t-
shirts, plastics and processed food.
The country has recently made considerable amount of revenue from homemade Nigerian
Movies which are sold locally and internationally. These movies are popular in other African
countries and among African immigrants in Europe.
2.2.6 Brief on Infrastructural Development in Nigeria
Infrastructure has made a net contribution of around 1 percentage point to Nigerias improved
per capita growth performance in recent years, in spite of the fact that unreliable power supply
held growth back. Raising the countrys infrastructure endowment to that of the regions middle-
income countries could boost annual growth by around 4 percentage points.
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Nigeria has made important strides toward improving much of its infrastructure. Compared to
many African peers, Nigeria has relatively advanced power, road, rail, and information and
communications technology (ICT) networks that cover extensive areas of the nations territory.
In recent years, Nigeria has conducted several important infrastructure sector reforms. The ports
sector has been converted to a landlord model, and terminal concessions now attract private
investment on a scale unprecedented for Africa. The power sector is undergoing a restructuring,
paving the way for performance improvements; the sector is finally on a path toward raising
tariffs to recover a larger share of costs. Bold liberalization measures in the ICT sector have
resulted in widespread, low-cost mobile services, Africas most vibrant fixed-line sector, and
major private investments in the development of a national fiber-optic backbone. A burgeoning
domestic air transport sector has emerged, with strong private carriers that have rapidly attained
regional significance.
But worrisome challenges persist in a number of areas, and loom the largest in the power sector.
Since 2001, when the Federal Government adopted the National Electric Power Policy, the
comprehensive reform and reengineering of the electricity supply industry has been central to the
thinking of government. Inoperative generation capacity and lack of investment mean that the
country has been able to meet only about half of its power demand. This, in turn, has resulted in
an extremely unreliable supply; social costs can be conservatively estimated at 3.7 percent of
gross domestic product (GDP). Meanwhile, the sector is hemorrhaging resources: historically,
power users have been charged a fraction of the true cost of production, and the utilitys
operational efficiency is among the worst in Africa. On a promising note, recent tariff and
institutional reforms in the power sector have helped to significantly reduce hidden costs, saving
about $1.3 billion (or 1.8 percent of GDP) per year. Notwithstanding this important gain,
however, the hidden costs of Nigerias power sector remain the highest in West Africa.
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Table 2.2.5-Oil Leak in Nigeria (Source: http://www.curseoftheblackgoldbook.com/)
Less visible, but also disturbing, is the water and sanitation sectors lack of development,
compared to other services. Piped water coverage is only a fraction of the nations electrification
rate, and access has been declining steeply in recent years, even as the practice of open
defecation continues to rise. Moreover, water utilities appear no more efficient than the power
utility. Irrigation development also remains low relative to the countrys substantial potential.
Last but not least, Nigerias road networks are in relatively poor condition, testifying that assets
are not being adequately maintained. The countrys poor air transport safety record is reason for
further concern.
Table 2.2.6- A journey to collect Water (Source: Water.org) Table 2.2.6- one of the Deplorable Roads in Nigeria
(Source: http://234next.com)
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The current Government under President Goodluck Ebele Jonathan has pledged to continue the
economic reforms of his predecessor with emphasis on infrastructure improvements.
Infrastructure is the main impediment to growth and in August 2010 the President unveiled a
power sector blueprint that includes privatization of the state-run electricity generation and
distribution facilities. The government also is working toward developing stronger public-private
partnerships for roads.
Addressing Nigerias infrastructure challenges will require sustained expenditure of almost $14.2
billion per year over the next decade, or about 12 percent of GDP. (As a point of comparison,
China spent about 15 percent of GDP on just infrastructure investment in the mid-2000s.) About
$10.5 billion is needed for federal infrastructure alone, most of it for capital spending and power.
Nigeria already spends $5.9 billion per year on federal infrastructure, equivalent to about 5
percent of GDP. Existing spending patterns are heavily skewed toward investment, with little
provision for operations and maintenance. (Information on the infrastructure spending of
subnational governments was not available, and so could not be assessed.) A further $2.5 billion
a year is being lost at the federal level due to inefficiencies of various kinds, most of them
associated with the power sector. The underpricing of electricity is by far the single-largest
source of inefficiency, even though cost-recovery tariffs would be affordable for the majority of
the population. Low capital budget execution is also an issue across the infrastructure sector.
When spending needs are set against current spendingand potential efficiency gainsan
annual funding gap of $3.6 billion per year, or around 3 percent of GDP, is revealed. With its
abundant oil revenues, Nigeria is relatively well placed to raise additional public finance for
infrastructure. Given the size of the economy, more could also be done to leverage domestic
capital markets, and there is scope to build on the comparative success of public-private
partnerships. Nigeria has also attracted much interest from financiers outside the Organization
for Economic Co-operation and Development (non-OECD), notably China.
In sum, Nigerias infrastructure challenges, though substantial, are not daunting given the
strength of the national economy. While recent policy measures suggest that the government is
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taking these challenges seriously, more remains to be done. The associated growth dividend is
well worth pursuing.
Nigeria's Delta region, home of the large oil industry, experiences serious oil spills and other
environmental problems, conflict in the Niger Delta about strife which has arisen in connection
with those issues. Waste management including sewage treatment, the linked processes of
deforestation and soil degradation, and climate change or global warming is the major
environmental problems in Nigeria. Waste management presents problems in a mega city like
Lagos, Abuja and other major Nigerian cities which are linked with economic development,
population growth and the inability of municipal councils to manage the resulting rise in
industrial and domestic waste. Haphazard industrial planning, increased urbanization, poverty
and lack of competence of the municipal government are seen as the major reasons for highlevels of waste pollution in major Nigerian cities. Some of the 'solutions' have been disastrous to
the environment, resulting in untreated waste being dumped in places where it can pollute
waterways and groundwater.
The quality and availability of Nigerias transport infrastructure lags behind many of its regional
peers. This is unfortunate given the countrys natural resource wealth, which could be invested in
infrastructure. Although Nigeria is very well connected to international maritime routes (30th),
the quality of roads, railroads, and airports is suboptimal, as reflected in the low position the
country occupies on the pillar that assesses the availability and quality of infrastructure (105th
overall and 15th in the region). Transport services are equally underdeveloped, although the
overall regulatory environment is fairly open to investment and to hiring foreign labor. At the
same time, insufficient security imposes relatively high costs on business.
Infrastructure is critical to human and economic development and is the catalyst for Foreign
Direct Investment. It is what defines the global competitive environment of Nigeria and is vital
in addressing unemployment today and in the future. The lack of infrastructure explains why
Nigerias cost of production has remained extremely high while industrial productivity has
declined; it explains why she spend N1.3 trillion on food imports while and farmlands lie fallow;
it is the reason why she lose lives every day to accidents and preventable diseases.
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Encyclopedia Wikipedia (March, 2011), Nigeria.http://en.wikipedia.org/wiki/Nigeria
Pinto, Brian, (May 1987) Nigeria During and After the Oil Boom: A Policy Comparisonwith Indonesia, The World Bank Economic Review, Vol. 1 No. 3, pp. 419
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Odueme, Stella (2011-05-09). ":RenCap projects 8% growth for Nigeria in 2011"Independentngonline.com. Retrieved 2011-05-28.
Hrbek, Ivan (1992). Africa from the seventh to the eleventh century,James Currey Publishers,p. 254. ISBN 0-852-55093-6.
IMF Survey: Nigeria Needs Sustained Reforms to Build on Success". Imf.org.Retrieved 2008-
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Lewis, Peter (2007). Growing Apart: Oil, Politics, and Economic Change in Indonesia andNigeria, University of Michigan Press. p. 168. ISBN 0-472-06980-2,Retrieved 2008-12-26.
McDonald, John F; Daniel P. McMillen (2010). Urban Economics and Real Estate: Theory andPolicy. Wiley Desktop Editions (2 ed.). John Wiley & Sons. p. 9. ISBN9780470591482.
World Bank (June 2011), Nigerias Infrastructure: A Continental Perspective Sustainable
Development Department, Policy Research Working Paper WPS5686,the World Bank, Africa Region
Foster, Vivien, and Cecilia Briceo-Garmendia, eds. 2009. Africas Infrastructure: A Time forTransformation. Paris and Washington, DC: Agence Franaise deDveloppement and World Bank.
http://en.wikipedia.org/wiki/Nigeriahttp://en.wikipedia.org/wiki/Nigeriahttp://en.wikipedia.org/wiki/NigeriaTop Related