Academic journal article European Journal of Sustainable Development

The Political Economy of Resource Curse and the Niger Delta Crisis in Nigeria: Matters Arising

Academic journal article European Journal of Sustainable Development

The Political Economy of Resource Curse and the Niger Delta Crisis in Nigeria: Matters Arising

Article excerpt

Introduction

This work builds on some earlier studies carried out, which have drawn attention to the dangers posed to the economies of resource rich nations, as espoused in the resource curse theory (Ross 1999, UNCTAD 1995, Auty 1993, Mahdavy, 1970). Our work intends to contribute to existing literature by looking specifically at the Nigerian case, with emphasis on the crisis in the Niger Delta. The work also went ahead to examine the environmental and ecological conditions of the inhabitants of this area where crude oil is exploited in commercial quantity on a daily basis. Nigeria is a peculiar case indeed, where crude oil was first discovered at Oloibiri in 1956, and in commercial quantity in 1958 (fifty years ago), along the southern coast of the Niger Delta which, thus led to a rise in the citizens' expectations. By the calculations of her citizens then, the foreign exchange to be earned from the export of this "black gold" (petro-dollars) would definitely turn around their fortunes for good. By 1966, available statistics show that oil became a significant contributor to Nigerian economy, yielding about $91,942,00, with over ten transnational oil corporations operating in the Niger Delta (see Ogbogbo, 2006). So much welfare services, job creation and general well being were expected from the Government, which serves as the major rent-taker from the oil exploiting conglomerates in the Country, that when these were not forthcoming as anticipated, the citizens became apprehensive. For more than three decades now, oil has remained the highest foreign exchange (external revenue) earner for Nigeria, this account for over 90% of foreign exchange earnings i.e. 80 to 90 percent of the country's Gross National Product.

Study Problems and Questions.

The above painted scene has played out in Nigeria for some time because before the late 1960s different regions of the country experienced financial boom from engaging in the production and export of agricultural products like cocoa, hides and skin, groundnut and palm produce. However, the 1970s witnessed the abandonment of these sources, with all attention focused on crude oil exploration, exploitation and export, which now made the product to become the main stay of the Nigerian economy. The major question at this juncture is what have been the effects of this shiftin focus on the country's GDP and the living standards of the people? What lessons, if any have succeeding governments and policy makers learnt from the mistakes of their predecessors? These are significant questions for our study because an analyst, like Ross (1999) has asked, "How does a state's natural resource influence its economic development?"(p. 297). It is a truism that those who refuse to recall and do something about history are bound to repeat history.

Objective of our Study

To Sodaro (2001) "political economy refers broadly to the relationship between politics and economics. It constitutes yet another major topic in comparative politics"(p.34). This truism constitute the reason for this research, which attempts to weigh the level of development in the Niger Delta Region of Nigeria with the amount of resources (foreign exchange), earned by the Federal Government from that area as a result of oil exploration and exploitation.

Theoretical Framework

The question of how states resource wealth influences their economic development has indeed featured prominently in world discourse for the last sixty years. These debates have revolved around paradigms like dependency theories, economic dualism, a proposed New International Economic Order (NIEO), East Asia's success, otherwise known as the Asian Tigers and Africa's collapse. Hence, in his contribution to the above, Ross (1999) observes that:

Since the late 1980s, economists and political scientists have produced a flood of new research that bears on this question. There is now strong evidence that states with abundant resource wealth perform less well than their resource - poor counterparts, but there is little agreement on why this occurs (p. …

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