Economy & Industry
The oil game
Nigeria is Africa’s leading oil producer with an output of over 2 million barrels of crude each day. Oil brings in around 95% of the country’s foreign earnings.
On the back of this oil production, Nigeria’s economy has been growing at around 7–8% annually for the past few years.
Though it pumps a lot of oil, Nigeria does not have the facilities to refine it. Billions of dollars earmarked for renovating refineries have vanished over the years. Therefore the country imports most of its petrol. In 2012, the government attempted to remove subsidies on this imported fuel. This caused mass protests. Nigerians did not see why they should have to pay more for petrol, when around 7 billion dollars was lost through corrupt payments on fuel imports between 2009–2011.
But despite its growing economy, poverty levels in Nigeria are on the rise – see Poverty & Healthcare. This is because the oil wealth is not trickling down into society at large. Revenue from the sector will from now on be shared between federal, state and local government. But ordinary people still fear much of the money will be kept in the hands of private individuals.
Because of the oil boom over the last two decades, there has been little investment put into other industries and service sectors. This means that in many areas of the economy, such as agriculture, the country has fallen behind – see Climate & Agriculture.
Greater investment is also needed in infrastructure such as roads and in the power network. Many towns and cities experience regular power cuts, while rural areas often have no access to electricity at all.
Most goods produced in Nigeria are for the domestic market. For example, the textile sector is important, with local cloth being made across the country – see Textiles.
However, the industry is threatened by cheap Asian imports and second-hand items. Discarded Western clothes are brought into Nigeria illegally through neighbouring countries and then sold through a vast number of 'bend down' stalls. The name comes from the fact that clothes are piled onto the floor and shoppers have to ‘bend down’ to rummage through them.