Nigeria - Changing economic world
What type of economy is Nigeria?
NEE - Newly Emerging Economy
What rank did Nigeria have in terms of GDP?
27th
What % of global oil does Nigeria supply?
2.5%, 13th in the world.
What global importance does Nigeria have?
6th largest population in the world.
What global importance does Lagos have?
A global economic hub.
What regional importance does Nigeria have?
- Fastest growing economy in Africa.
- Highest GNI in Africa.
What political context is there for Nigeria?
- Former British Colony that gained independence in 1960.
- Political instability and civil war followed independence.
- Stable government since 1999, encouraging overseas investment.
- It is now a member of the British Commonwealth.
What social context is there for Nigeria?
- Multi-ethnic and multi-faith country.
- Recent religious and ethnic tensions have destabilised the economy. E.g The Islamic fundamentalist group Boko Haram.
What cultural context is there for Nigeria?
- Music like Fela Kuti.
- A large film making industry --> Nollywood.
- Literature like Wole Soyinka.
- Sport --> Won the Africa Cup of Nations three times.
What environmental context is there for Nigeria?
- Natural environment ranges from tropical rainforests in the South to semi-deserts in the North.
- Diseases like malaria and pests like the Tsetse fly, which is lethal to livestock.
- 14% of rainforest was lost between 2005 and 2020.
How is Nigeria's industrial structure changing?
- Employment in agriculture is declining due to increased mechanisation and rural-urban migration.
- There is rapid growth of communications, retail, manufacturing and finance.
What % of Nigeria's GDP is from manufacturing?
10%
How can the manufacturing industry stimulate economic development?
- Multiplier effects
- Provides, regular, secure incomes, and therefore taxation revenues.
- A thriving industrial sector attracts foreign investment.
- Oil processing creates chemical by-products. This has led to the growth of chemical industries such as soaps, detergents and plastics.
What does TNC stand for and what is it?
A transnational corporation is a large company that operates in several countries.
Why do TNCs locate in foreign countries?
- Tax incentives
- Laxer environmental laws
- Cheaper labour and raw materials
- Access to a wider market
How many TNCs operate in Nigeria?
About 40.
What are the advantages of TNCs operating in Nigeria?
- Jobs and development of skills.
- More money is spent in the economy.
- Investment by TNCs in local infrastructure and education.
- The sales of local business may rise due to TNCs.
- Valuble export revenues are earned.
What are the disadvantages of TNCs operating in Nigeria?
- Local workers may be poorly paid.
- Working conditions may be poor.
- Management/High paying jobs often go to foreign employees brought in by the TNC.
- Economic leakage.
- Grants and subsidies used to attract TNCs could have been used to invest in the country's own industries.
What benefits has Shell Oil brought to Nigeria's economy?
- Contributes to taxation and export revenue.
- Directly provides 65,000 jobs for Nigerians and 250,000 jobs in related industries.
- Gives 91% of contracts to Nigerian companies.
- Support growth of Nigeria's energy sector.
What drawbacks has Shell Oil brought to Nigeria's economy?
- Oil spills cause water pollution and soil degradation, reducing agricultural production and fishing yields.
- Frequent oil flares send toxic fumes into the air.
- Militant groups disrupt oil supply in the delta.
- Oil theft leads to Shell and the Nigerian government losing $23 billion a year.
How is Nigeria politically connected to Britain?
- Former British colony that gained independence in 1960.
- It is now a member of the British Commonwealth.
What political and economic groups is Nigeria a leading member of and what role do they play in them?
- UN = United Nations --> Peacekeeping role.
- WTO = World Trade Organisation --> Promoting free trade.
- OPEC = Organisation of the Petroleum Exporting Countries.
- African Union --> Economic and peacekeeping role.
- ECOWAS = Economic Community of West Africa States --> Trade group.
- CEN-SAD = Community of Sahel-Saharan States --> Trade and sporting links.
What are Nigeria's main imports?
- Refined oil from the EU and the US.
- Cars from Brazil and the US.
- Telephones from China.
What are Nigeria's main exports?
- Crude oil
- Natural gas
- Rubber
- Cocoa
- Cotton
What issue is rising in Nigeria's exports?
High quality crude oil dominates Nigeria's exports, reducing the importance of Nigeria's agricultural products. This leads to reduced income for farmers, contributing to the widening development gap.
Why does Nigeria still received international aid?
- Poverty --> Over 60% of the population lives on less than $1 a day.
- Birth and infant mortality rates are high; whereas life expectancy is low.
- Sprawling squatter settlements in large cities like Lagos.
How has aid helped Nigeria?
- In 2014, the World Bank approved $500 million to fund development projects and provide long-term loans to businesses. This helped to reduce the over-dependence on oil exports.
- The NGO Nets for Life provides education on malaria prevention and distributes anti-mosquito nets to many families in Nigeria.
What prevents official aid from being used effectively in Nigeria?
- High levels of corruption.
- Previous and current governments using aid money for other purposes such as defence.
- Donors having political influence over what happens to the aid.
- Money is often used to promote the commercial self-interest of the donor.
What environmental impacts of economic development in Nigeria?
- Mining --> Tin mining leads to soil erosion. Local water supplies were also polluted with toxic chemicals.
- Oil extraction --> Oil spills in the Nigeria Delta have impacted freshwater and marine ecosystems. They cause acid rain which harms wildlife.
- Industrial growth --> In Lagos, many harmful pollutants go directly into open drains and water channels. They are harmful to people and damage ecosystems downstream. Some industries dispose of chemical waste on nearby land, threatening the groundwater quality.
- Commercial farming --> Land degradation, water pollution due to chemicals, soil erosion and silting of rivers.
- Deforestation --> Cheetahs, giraffes and nearly 500 types of plants have disappeared from areas of commercial farming and deforestation.
How has economic development affected the quality of life for Nigerians?
- Reliable, better paid jobs in manufacturing industries or services.
- Better access to safe water and sanitation.
- Higher disposable income to spend on education, homes, food, clothes, and recreation.
- Improvements to infrastructure such as roads.
- Better-quality healthcare due to investments.