Academic journal article European Journal of Interdisciplinary Studies

Nigeria’s Mono-Cultural Economy: Impact Assessment and Prospects

Academic journal article European Journal of Interdisciplinary Studies

Nigeria’s Mono-Cultural Economy: Impact Assessment and Prospects

Article excerpt

1.Introduction

Nigeria in 2014 attained the status of the foremost economy in Africa, overtaking South Africa which had occupied the position for many years. An assessment of the position attained by Nigeria showed that the revenue from oil exports contributed greatly to it. Although, for the first time, other sectors were adequately assessed to reflect the country's GDP which resulted in a higher position than that of South Africa. Trading Economics (2016) indicates that Nigeria's GDP was put at USD 568.50 billion in 2014. Crude oil export contributes enormously to the GDP figure following its accounting for nearly 90% of export product. With the decline in oil revenue since 2014 and continued price volatility, Nigeria found itself faced with many fiscal challenges including funding of annual budgets and other fiscal responsibilities. Recently in 2016, it was revealed in the news that Nigeria slid into recession and South Africa overtook Nigeria again as the foremost economy on the African Continent. Nigeria's case is compounded and challenged by various national problems such as terrorism in the north and militancy in the south-south, which further affects oil output and revenue. The paper therefore assesses the nature of the oil based mono-cultural economy of Nigeria, with a broader analysis of the situation. It uses secondary data in the assessment of the situation while drawing useful conclusions.

The research has the following objectives:

a. To assess the mono-cultural oil based economy of Nigeria;

b. To assess the oil price vulnerabilities over the years;

c. To highlight the negative implications of the mono-cultural oil economy of Nigeria and why the country needs to urgently diversify away from dependence on oil export revenue.

The structure of the paper is configured in the sequence of a literature review, the case of Nigeria on a basic oil resource economy and the implications for Nigeria and why it should diversify away from this oil resource dependency. Conclusions would be drawn at the end of the article on the issues assessed and discussed. One of the conclusions drawn is the fact that crude oil price volatility continuously persists and therefore would always result in an unpredictability of revenue for such countries as Nigeria, which are heavily dependent on crude oil export. Furthermore, the fact that Nigeria has evident need to diversify away from this crude oil export dependence was underscored.

2.Literature Review

The literature review assesses the meaning of mono-cultural economy, highlights two theoretical frameworks on the issue of basic resource dependent economies, as well as exposes the volatility of global oil price. This part would further examine contributions of other scholars on oil based economies and the case of Nigeria in particular.

2.1: The Concept of 'Mono-cultural Economy': The term mono-cultural economy refers to an economy mainly dependent on a single product or resource for economic growth and development. The concept could further be referred to a case where any country depends on a single product sales or exports for its budget funding especially to the tune of 70% of revenue. Mono-cultural economy could also refer to the situation when any country depends on a basic product resource for overall higher percentage of national earnings and contribution to the Gross Domestic Product (GDP). Idemudia (2012) captures this mono-cultural concept in the case of Nigeria as thus, "The discovery of oil in 1956, and its subsequent extraction since 1958, over the past 50 years, has transformed the Nigerian economy from an agricultural based economy to an economy essentially dependent on petroleum" (Idemudia 2012, p.1).

2.2: Theoretical frameworks on Basic (single) Resource Economies: There are theoretical frameworks on the challenges of basic (single) resource economies as examined herein. Basing economic growth around a single resource remains an issue for discussion within the economic field. …

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