INTRODUCTION
This article overviews the growth and development of the Nigerian economy from
independence to present times. Specifically, the following periods are
discussed: the pro-oil boom decade (1960-70); the period of the oil boom (1971
1977); the period of stabilization and structural adjustment (1986 - 1993) and
the period of guided deregulation (1994 -1998).
GENERAL PERFORMANCE
OF THE ECONOMY
The
Nigerian economy has had a truncated history. In the period 1960-70, the Gross
Domestic Product (GDP) recorded 3.1 per cent growth annually. During the oil
boom era, roughly 1970-78, QDP grew positively by 6.2 per cent annually - a
remarkable growth. However, in the 1980s, GDP had negative growth rates. In the
period 1988-1997 which constitutes the period of structural adjustment and economic
liberalization, the QDP responded to economic adjustment policies and grew at a
positive rate of 4.0. In the years after independence, industry and
manufacturing sectors had positive growth rates except for the period 1980-1988
where industry and manufacturing grew negatively by - 3.2 per cent and - 2.9
per cent respectively. The growth of agriculture for the periods 1960-70 and
1970-78 was unsatisfactory. In the early 1960s, the agricultural sector
suffered from low commodity prices while the oil boom contributed to the
negative growth of agriculture in the 1970s. The boom in the oil sector lured labor
away from the rural sector to urban centers.
The
contribution of agriculture to GDP, which was 63 percent in 1960, declined to
34 per cent in 1988, not because the industrial sector increased its share but
due to neglect of the agricultural sector. 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 percentage 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 consists
mostly of public savings especially during the period 1973-80. The current
account balances before official transfers are negative for 1965-73,1980-88 and
1991-98.
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 labor exchanges, apart from the inherent distortions
in the country's labor market. Based on some basic indicators, it appears that
the economy performed well during the years immediately after independence and
into the oil boom years. However, in the 1980s the economy was in a recession.
The on-going economic reform program is an attempt to put the economy on a
recovery path with minimal inflation. The analysis that follows tries to
discuss the developments in the economy for different periods.