An Overview of The Nigerian
Economic Growth and
Development
Today:Thursday, June 25, 2015
By
A. H. Ekpo & 0. J. Umoh
INTRODUCTION
This article overviews the growth and
development of the Nigerian economy from inde
pendence 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 stabilisation 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 con stitutes the period of
structural adjustment and eco nomic
liberalisation, the QDP responded to economic
adjustment policies and grew at a positive rate of
4.0. In the years after independence, indus try and
manufacturing sectors had positive growth rates
except for the period 1980-1988 where indus try
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 agricul tural 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 labour
away from the rural sector to urban centres.
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 sec
tor. 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
man ufacturing 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 per centage 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
bal ances 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
labour exchanges, apart from the inherent distor
tions in the country's labour 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 programme 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.
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