A look at the present desperate situation of Nigeria is enough to force one into the usual conclusion of bleak and unenviable economic future– a future of permanent or structural emergencies. This condition has in part been aggravated by inadequate shelter, low health standard, lack of gainful employment, low wages and inadequate income for subsistence and self sustenance. Above all, there is also the problem of poverty. By this mid 20th century. It had become a very profound problem associated with, and threatening the development aspirations of the country. The growth oriented development theories and strategies employed by the country, at the producing of western capitals counties resulted in little or no growth; but they occasioned serious inequalities in income distribution and development in the country.

       The benefits of economic growth and development did not “trickle- down” as predicted by the new- classical development theorists (Wilber, 1979) instead, they became concentrated at the top; the rich got richer and the poor got poorer. this situation led to paradigm shift in development theory in the late 1960s and early 1970s with focus of development shitting from growth to growth with equity (James and weaver 1981).

       Development strategy came to favour meeting basic needs of citizens, rather than an exclusive concern with rate of economic growth, measured in terms of G.N.P per capital (chenery et at, 1974). Consequently, concern with the problem of income inequalities, poverty, and with the need to meet basic needs of people in the developing countries led the world bank to declare “the assault on world poverty” in the decade of the 1970s, there by elevating the issue to a global political context. But efforts by the world Bank failed to resolve the problem, if any things the recovery and adjustment programs initiated by the bank in the 1980s aggravated problem. E.g the sub- Saharan African region that, statistically, has one of the highest incidences of poverty in the world remained severely afflicted despite the adjustment programs introduced in virtually every country. Between 1970 and 1985, the number of those categorized under absolute poverty in sub-Saharan Africa, ie. Those whose income could not meet their basic needs, increased by two-thirds compared to an increases of one fifth for the entire third world (UNDP, 1981).

       The opinion that grounded Nigeria economic prospect in the 60s- the first decade of independence- was soon replaced in the 70s by increasingly poor performance in many facets of the economy as substantial gafs began to appear between hopes and achievements, between promises and performance and between expectations and realities. But unfortunately for the nation, the international economic on which country is so much dependers became increasingly hostile.

       At the root of economic backwardness, stagnation and decline in Nigeria is the poor performance of the agriculture sector, which ideally, should have been the predominant sector and of course the root cause of the rapid decline in food production are well known. Domestic policies with regard to agriculture had often constituted a disincentive for farmers, while the high rate of rural-urban migration has further aggravated the situation. This has resulted in shortage of rural labour force, while at the same time increasing rapidly the population of urban dwellers who have to be fed by the rural people consequently, by the decade of the 1980s, instead of  getting their basic needs satisfied, a majority of Nigeria found themselves edged down, below poverty level; that is being able to only earn and live on an income which is less than what is considered essential to cover basic needs. Indeed, many could not even earn enough to satisfy their basic needs, thus characterized by absolute poverty.


       That there is poverty in Nigeria and that it has progressively worsened is therefore an established fact the World Bank itself has summarized the Nigeria situation as follows:

       The rise in oil prices and in Nigeria oil production increased per capital consumption and income thought most of the 1970s, but the economic reversal of early 1980s has had a server’s effect on the country’s poor Consumption has plummeted by 7% a year and standard of living was lower in mid-1980s than in 1950s.

Analysis of caloric intake shows no improvement between 1952 and 1985. The economic crisis of the 1980s was so servers that it more than cancelled out the progress of the previous twenty years.

       The 20th century was such an inter-dependent world (even though there were a lot of inequities and inequalities)  that any attempt by Nigeria to have tried to go it alone would have worsened the already bad case. forty one years after independence the envisaged economic emancipation remains elusive and at best, a hope.

The economics is still basically under- developed, with low income per head, low level of productivity, a circumscribed and fractured industrial base and a high dependence of primary export commodities, high degree of illiteracy and low level of life expectancy. The resultant effect is an economy that is characterized by high level of openness and domination by foreign products. But before any serious consideration for the 21st century could be tabled, it is pertinent that we first appraise the country in the 20th century.

2. Nigeria’s economy in the 20th century.

A Rear mirror view.

The structural problem that hindered growth for the nation was the subsisting mono-cultural dependent on a single export commodity. If it were not agricultural cash crop, it would be crud oil. This made the economy to be vulnerable to fluctuation in world prices of such commodities. The resultant effect was that when ever global prices fell, the economy was thrown out of gear. It became more and more difficult for government to meet its obligations.

       The Government could no longer pay for imports; especially industrial raw materials and worse still, revenue severely started dwindling. And since the internal economy was basically underdeveloped with a sharp bifurcation this resulted into weak linkages between the traditional and modern sectors, This of course made growth virtually impossible.

       By about 1982 a serious socio-economic crisis began to rear its ugly head in Nigeria. The crisis resulted from combination of factors, such as global recession, declining oil revenues, increase debt burden and heightened primitive accumulation by a profligate, corrupt and prebendal new- colonial dominant classes, vituperation and ill-conceived policies and programs intended to address the crisis, became political techniques and avenues for accumulation at the expense of the objective interest of increasingly popularized Nigerians.

Recommended:  Complete Guide on research project writing and graduation thesis

       As a result of this crisis the economy developed more or less in reverse gear, as indicated by the average annual rate of growth of GDP of 1.1% between 1980 and 1988. This sharply contrasts with the rate of growth of 6.9% between 1965 and 1980. Attahiru m, Jega, crisis Adjustment and poverty in Nigeria A critical Assessment, 1993, paper delivered at the National conference on economic and social policy options for the third Republic, organized by Friedrich  Ebert foundation in collaboration with the African center for development and strategic studies). Additionally wages stagnated and purchasing power declined. For example, earnings per employee in the manufacturing sector averaged -9.6.

       Growth rate between 1980 and 1987 (taking 1980 as a base year), while average annual rate of inflation was 11.6%.

       Private consumption grew at an annual rate of- 0.1%  between 1980 and 1988, in contrast to 5% between 1965 and 1987 Daily calorie supply per capita also declined to 2,146 in 1986, compared to 2,185 in 1965 (world bank, 1990:252).

 The crisis of 1980 manifested itself not only as a crisis of production gives capacity under- utilization, or as a crisis of under- consumption, given declining incomes and purchasing power but also and significantly, as a crisis of legitimation. This is in the sense that pauperization bred discontent and social upheavals, questioning the legitimacy of the state, at the sane time that intra-dominant classes conflicts and struggles in the sphere of accumulation gave justification of military coup d’etats and counter-coup d’etats which ended democratic civilian governance of the second Republic (Altahiru page op.cit.). between g1986 and 1987, the regime of General Babangida introduced the twin programs of economic adjustment and political transition. The economic adjustment  program itself was a strategy recommended by the world Bank for attacking poverty (namely: Labour- intensive employment generation programs and provision of social services). As is well know the critical elements of S.A.P  were as follows:

       Introduction of price reforms by removing existing control mechanism and structures, introduction of trade liberalization by removing barriers, giving export incentives and deregulating exchange rates of currency;

       Reduction of public sector involvement in the economy, divestiture through commercialization and/ or privatization and Altempts to “ roll-back the state”, by cutting  public expenditure on social services and so on. But as it were, the inherent contradictions associated with the critical element of poverty in Nigeria. A critical assessment of the period 1985 and 1990s reveals that SAP had been any thing but effective, insofar as reduction of poverty was concerned. Therefore, it can be argued that the politics of structural Adjustment had only increased, rather than alleviated the problems of poverty in the county, both in absolute and relative terms.

  1. Dependent Economy: throughout the last century the nation operated a dependent economy. The Nigeria flair for conspicuous consumption of non-essential goods is a veritable source of its inordinacte demand for imports, thereby rendering her a fertile dumping, and ground for all sorts of consumer goods. Basically, the economy imports what it does not produce and consumes what others produce since she is not self reliant the nation depends wholly on the economies of western Europe North America and Japan. This dependency further reduced its capacity for development. Rather than develop a strong industrial base our economy has remained predominantly an import- dependent economy with the resultant effect of generating employment opportunities abroad, to the determent of our own economy.
  2.  Oil Economy: the advent of petrol-dollars has brought about a huge windfall that unfortunately, was not channeled to build a productive base. A lot went on expensive infrastructure, white elephant projects and importation of luxury goods and huge appetite for consumer produce. This ultimately fuelled corruption in the bureaucracy. Creating a subculture that emphasized connection to state office and with access to oil money, people look upon wealth as ‘manna’ for heaven. In this culture, the whole essence of governance lost its focus as the elites struggle to grab as much of oil wealth as they could. In no small way this equally contributed to military rule, political instability and the eventual collapse of the second Republic with sever implication to the health of the economy. This oil economy worsened the economic structure in several ways:
  3. It deepened the problem of dependency in that agriculture was neglected and Virtually destroyed. Therefore, by the late 1970s, we became a net importer of food, meat, rice, etc. And our agriculture sub-sector lost its focus. It is generally forgotten that 30years ago Nigeria was the worlds most important  producer of palm kernel and palm oil, the second most important producer of cocoa, the fifth rubber exporter and a major exporter of cotton, hides and skins, timber, tin and columbite,
  4. When Nigeria’s export rise phenomenally there was no corresponding diversification, therefore, when the oil market collapsed, the Nigerian economy collapsed with it. The depletion of the foreign exchange was so massive or contractual obligation beyond 30 days.
Recommended:  Difference between in-text citation and Reference list

Problems started, and for the first time, the nation had to go the IMF for support to sustain the economy. The misadventure of the 70s brought in the Breton wood institutions, and hence, the debt trap that has hung on our neck ever since;

  1. Part of what contributed to the collapse of oil was the discovery of oil in Alaska and the North Sea. The drop in revenue occurred at a time when that nation’s taste for imported food and other finished goods had been well nurtured to maturity. The 1981 glut in the international oil market was devastating to Nigeria. Despite this glaring but dwindling oil revenue, the government failed to reduce the nation’s import bill by the beginning of 1983, the nation’s foreign exchange reserve had crashed USA, and more gruesome still, the foreign debt stood at 10.0 billion USA, Today, there is confusion between CBN and federal ministry of finance as to what our external debt figure stands. It is however believed to be between 28 and 32 billion USD.


Google www. Nigerdelta congress. Com/articles.

A look at Nigeria.

Fridman, Milton (1953) ESSAYS IN POSITIVE ECONOMICS  University of Chicago press.

Gordon, R.J (1978) MACROECONOMICS Boston, little and Brown.

Harvey, J (1983) Modern economics 4th Edition, Macmillan Press Ltd.

Begg, D, fischer S, and Dornbusch R (1984) economics McGraw- HILL Coy Ltd.

Now it is your turn. Let us know if you have comment, suggestions or a different view

error: Content is protected !!
Open chat
WhatsApp Now
We can get that stress off your shoulder.

You can call now on +2348060755653 or click below to chat.