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Nigeria's Economic System & Lack of Economic Growth

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  • 0:01 Agricultural Base
  • 0:35 Oil Takes Center Stage
  • 1:36 Resource Curse
  • 2:14 Government Corruption…
  • 3:48 Lesson Summary
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Lesson Transcript
Instructor: Jessica Whittemore

Jessica has taught junior high history and college seminar courses. She has a master's degree in education.

Nigeria has had many struggles with its economy in the last several decades. In this lesson, you'll learn about the 'resource curse': the government corruption and violence that has plagued the country.

Agricultural Base

Rich petroleum deposits and flowing natural resources are often associated with modernization and wealth. However, there are countries in the world that have both, but whose people still reside in poverty. One such country is Nigeria. Located in West Africa, Nigeria's economy has historically leaned on agriculture to survive. Not only did farming provide food and work for the country's huge population, it also provided them with revenues through exporting their crops to other countries. Nigeria's principal crops have included cocoa, corn, peanuts, and rice.

Oil Takes Center Stage

Beginning around the 1950s, things began to change in Nigeria. Rather than focusing efforts on agriculture, the oil industry started taking center stage. To put it simply, the Nigerian government started putting all of its eggs in the oil basket. As the government started beefing up oil production, many people started leaving their farms and moving to the cities in search of jobs in the oil industry. Sadly for the people of Nigeria, this flight to the city caused them more harm than good.

As citizens moved to the cities, the farms were left without workers, and the agricultural foundation of the country began to really weaken. In addition to affecting Nigeria's exportation of agricultural products, this resulted in a serious food shortage for the Nigerians themselves. Having one of the top ten largest populations in the world, this spelled disaster for many people. Despite the rich oil deposits found in the country, its economy continued to flail. Yes, oil jobs are good. However, if there's no food to buy, what's the point?

Resource Curse

Adding to this serious issue, the dropping oil prices of the 1980s brought further catastrophe for Nigeria. After all, if all your eggs are in one basket and that basket fails, you're in serious trouble. This contradiction of sorts, being rich in natural resources, yet poorer than many countries without resources, goes by two names. Economists call it the resource curse or the paradox of plenty, but no matter which name you choose, it often occurs when a country pours all its energies into a single industry while neglecting its others.

Government Corruption & Violence

Another thing that has placed a huge stress on the Nigerian economy, and that also is blamed for exaggerating the resource curse, is government corruption. As revenues from the oil industry pump into the country, government officials often see it as a way to pad their own pockets. Rather than the profits benefiting the average Nigerian, they remain in the hands of the upper crust. A very, very small percentage of oil revenues actually trickle down to everyday people.

Fortunately for Nigerians, the past few years have seen calls for government reform. Recent ruling officials have taken strides to stem government corruption and the economy is seeing signs of improvement. This has led many to be hopeful that Nigeria's recent economic growth will actually begin to benefit the people of Nigeria. However, Nigeria faces another obstacle, a deadly one.

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