Nigeria has cause to cheer after all with its total wealth, popularly referred to as Gross Domestic Product (GDP) rose from a paltry $4.2 billion when it had independence in 1960 to $448.12 billion as at 2019, a growth of 10,556.42%.
Trade in terms of of exports has grown reasonably, though with Nigeria trade balance in the negative in the 1960s and early 1970s. At least exports rose astronomically by 40,565.42 per cent from $0.39 billion in 1960 to $61.7 billion in 2018.
Economy seem to be growing faster
Analysts are happy that, the economy seem to be growing faster than the country’s population. Population grew 356.67 per cent in the last 60 years. They are however cynical that, the growth, since independence do not seem to trickle down.
A breakdown suggests that, the nation’s wealth saw a sudden surge after the discovery of crude oil.
GDP, which is the value of finished goods and services of a country with a specific time was before the independence sustained by agriculture mostly until when crude oil was discovered.
The civil war
Nigeria’s GDP fell as a result of the civil war, in spite of oil discovery to $1.255 billion in 1970. But because of the oil boom, around 1972 the nation’s wealth rose to $6.42 billion in 1980. That was after the Udoji commission has approved so much money for civil servants.
Since then, Nigeria’s GDP has continued to soar, reaching $54.04 billion in 1990, and by 2000 has risen to $69.45 billion. Analysts say, the return of democracy restored so much confidence that wealth was easily grown, with the nations’ international friends ready to do business with the country. By 2010, GDP has grown to $363.36 billion, and later $448.12 billion in 2019, becoming the biggest economy in Africa.
Economic rent
Crude oil provides a major source of economic rent to a nation, since oil products could be sold at a value that far surpasses its cost of extraction. Some researchers have disclosed that an economy with abundant resources will seek more rents than those with little resources. In Nigeria, for instance, oil riches have been identified to be one of the primary drivers of the rent-seeking activities and corruption. The oil boom of the 1970s was responsible for the emergence of disorderliness in Nigeria. There was a remarkable increase in the foreign exchange earnings during the oil boom era in Nigeria. However, the utilization of oil boom resources in funding some laudable public projects in Nigeria was characterized by political corruption.
So, it is not surprising that, the trade balance between Nigeria and the rest of the world was in deficit. Even when oil has been discovered since 1966 and exploration started in 1968, due to lack of sound fiscal policies.
When, exports were buoyed by the discovery of crude oil, imports continue to tag along as politicians and other wealthy Nigerians has since developed a taste to imported goods and services.
Trade balance
In 1960, trade balance stood in a deficit of $0.33 billion. Nigeria exported goods and services worth $0.39, but imported goods worth $0.71 billion. The deficit continued into 1970 in spite of the fact that crude oil has been discovered. Deficit stood at $0.36 billion, as export was $1.05 billion, while imports was $1.41 billion.
The story however became positive as the country’s trade balance then stood at a deficit of $6.54 billion. Exports stood at $18.86 billion while imports was $12.32 billion.
The positive outing continued until 2018 when trade balance returned to deficit at $8.02 billion. Export stood at $61.7 billion, whereas imports was $69.72 billion.
Adoji Adams, an economist in Lagos said, at 60, Nigeria would have been a place to be, except for the fact that the growth witnessed has somehow not trickle to the people, with population growing at a less faster rate the economy.
Nigeria’s population stood at 45.14 million in 1960. It rose to 55.98 million in 1970, 74.42 million in 1980, 90.21 million in 1990, 122.28 million in 2000 and 206.14 million in 2020
