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).
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.