MORE ABOUT THE GOVERNMENT'S FAILURE TO INVEST IN THE RENEWABLE NATURAL RESOURCE SECTOR OF THE ECONOMY
Despite substantial oil revenues, Nigeria is one of the poorest countries in sub-Saharan Africa. The country has a Human Development Index, according to the United Nations Development Programme, which puts it 139th out of 173 countries, and a per capita Gross Domestic Product (GDP) of US$340 compared to US$1000 in 1980. The reason for this poor and deteriorating economic situation arises from the neglect of the Renewable Natural Resources (RNR) sector of the economy (Agriculture, Forests & Fisheries) in favour of oil revenues, coupled with a rapid increase in population which has put particular pressure on the RNR sector.
The situation is exacerbated by endemic corruption which leads to economic inefficiencies and a poorly functioning national infrastructure. Moreover this corruption has created massive income inequity giving rise to a small wealthy elite in juxtaposition with a poverty stricken majority much of which is increasingly urban based. This situation is causing social tensions.
Oil revenues provide about 25% of GDP, 90% of foreign exchange earnings and 70% of budgetary expenditure. Thus the economy as a whole, the provision of government expenditure and services, and the national debt are particularly subject to variations in world oil prices. The economic boom of the 1970s was based on rapidly increasing oil revenues and international borrowing: the economic decline of the 1980s was based on declining revenues and an increasing debt service burden. During all this period, the non-oil sector, especially agriculture, which accounts for 35% of GDP, was neglected. From being a major producer and exporter of cocoa, palm oil (the world leader in 1960), cotton, timber and groundnuts in the early 1970s, Nigeria had, by the 1990s, become a net importer of agricultural products.
Some respite from this dismal economic picture came from the Structural Adjustment Programme pursued between 1986 to 1992, which, for a while, transformed a GDP decline of 2% p.a. to an increase of 5% p.a. This improvement arose largely from a positive response from the RNR sector, especially agriculture. Nonetheless the increased agricultural production appears to have arisen from an expanded area of cultivation and from reducing fallow periods, rather than from improved productivity. One of the important reasons for this failure arose from the inability of the SAP to free fertiliser marketing from inefficient government control.
While investment in the RNR sector continues to be insufficient, the population is growing fast, having more than doubled since Independence, and putting huge pressures on RNRs. In parts of the South, rural population densities have reached 600 persons per square kilometre. The resulting reduced fallow periods have reduced yields while agricultural land is expanding at the expense of forests and tree cover generally, which is, in turn, damaging water catchments and encouraging large scale sheet and gully erosion. These environmental problems are compounded by the polluting effects of expanding cities growing faster than the national rate, and by poorly controlled primary and secondary industry.
In sum, the condition of the Nigerian soil resource is declining rapidly. The subsequent environmental degradation is impoverishing the mass of Nigerians who do not have access to oil wealth.
From an ERA article of 1997
