Nigeria The Economy
Ife bronze head said to represent Olorun,
god of sea and wealth
A MAJOR FEATURE of Nigeria's economy in the 1980s, as
in the
1970s, was its dependence on petroleum, which accounted
for 87
percent of export receipts and 77 percent of the federal
government's current revenue in 1988. Falling oil output
and
prices contributed to another noteworthy aspect of the
economy in
the 1980s--the decline in per capita real gross national
product
(GNP--see Glossary),
which persisted until oil prices
began to
rise in 1990. Indeed, GNP per capita per year decreased
4.8
percent from 1980 to 1987, which led in 1989 to Nigeria's
classification by the
World Bank (see Glossary)
as a low-income
country (based on 1987 data) for the first time since the
annual
World Development Report was instituted in 1978. In
1989
the World Bank also declared Nigeria poor enough to be
eligible
(along with countries such as Bangladesh, Ethiopia, Chad,
and
Mali) for concessional aid from an affiliate, the
International
Development Association (IDA).
Another relevant feature of the Nigerian economy was a
series
of abrupt changes in the government's share of
expenditures. As a
percentage of gross domestic product
(GDP--see Glossary),
national government expenditures rose from 9 percent in
1962 to
44 percent in 1979, but fell to 17 percent in 1988. In the
aftermath of the 1967-70 civil war, Nigeria's government
became
more centralized. The oil boom of the 1970s provided the
tax
revenue to strengthen the central government further.
Expansion
of the government's share of the economy did little to
enhance
its political and administrative capacity, but did
increase
incomes and the number of jobs that the governing elites
could
distribute to their clients.
The economic collapse in the late 1970s and early 1980s
contributed to substantial discontent and conflict between
ethnic
communities and nationalities, adding to the political
pressure
to expel more than 2 million illegal workers (mostly from
Ghana,
Niger, Cameroon, and Chad) in early 1983 and May 1985.
The lower spending of the 1980s was partly the result
of the
structural adjustment program (SAP) in effect from 1986 to
1990,
first mooted by the International Monetary Fund
(IMF--see Glossary)
and carried out under the auspices of the World
Bank,
which emphasized privatization, market prices, and reduced
government expenditures. This program was based on the
principle
that, as GDP per capita falls, people demand relatively
fewer
social goods (produced in the government sector) and
relatively
more private goods, which tend to be essential items such
as
food, clothing, and shelter.
Data as of June 1991
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