Economic World 2 - Nigeria Flashcards
What is Nigeria our case study for?
An NEE experiencing rapid economic development.
Describe the location of Nigeria
Nigeria is located in West Africa.
Its coastline borders the Gulf of Guinea (which is within the South Atlantic ocean).
Bordering countries include Niger (north) ,and Cameroon (east).
What is the importance of Nigeria regionally? Agriculture
Nigeria has the highest agricultural output in Africa.
This means the country provides food security for both its population and that of nearby countries, which reduces reliance on food imports.
What is Nigeria’s population?
≈ 218 million (2022)
What is the importance of Nigeria regionally? Economy
Nigeria is the fastest growing economy in Africa, with the highest GNI on the continent.
This means that there are many employment opportunities for both members of its population and those from nearby countries (who often migrate to Nigeria for jobs in industries like oil).
It’s rich culture (music, food etc.) is enjoyed throughout Africa.
Economy (for understanding)
The state of a country or region in terms of the production and consumption of goods and services and the supply of money.
What is the importance of Nigeria globally?
2.7% of the World’s oil is supplied by Nigeria.
This means that the country can supply oil for many others, helping to meet high global energy demands.
Oil is of particularly high importance for developed like the UK which have become reliant on oil for transport and energy production.
Name the capital city of Nigeria
Abuja
By 2050, Nigeria’s economy will be…
..in the world’s top 20 largest economies.
This means it will be important in global supply chains, importing and exporting goods worldwide (particularly oil).
Nigeria’s economy is ___ based.
oil
What does rapid economic development lead to?
Significant social, environmental, and cultural change.
What is the wider political context in which Nigeria is placed? - Colonialism
European colonial powers drew up a political map of Africa in 1883, with Nigeria created as a British colony.
This affected Nigeria’s economic development because Britain developed trading links for the country (primarily used the trade of palm oil and slaves).
Infrastructure was also improved - to allow more trade inland.
Despite this, money from the exports was invested in Britain’s development rather than Nigeria’s.
What is the wider political context in which Nigeria is placed?
Nigeria gained independence in 1960 but experienced political instability for years as different regions fought for control.
As a result, there was a civil war from 1967 - 1970.
This hindered economic development.
Positive politics in Nigeria
Elections in 2011 and 2015 were declared ‘free and fair’ leading to increased political stability in the country.
This has attracted economic investment from TNCs (from China, the USA) which has allowed Nigeria to move from an LIC to an NEE.
What is the wider social context in which Nigeria is placed?
Nigeria’s population is multi-cultural, with over 500 languages spoken and over 250 minority groups.
This is a strength, but has led to some regional conflicts (for example over the faith of an area) - hindering development.
What is the wider cultural context in which Nigeria is placed?
-Nigerian culture is rich and varied due to high social diversity.
-Its film, music, and literary sectors thrive, with “Nollywood” the 2nd largest film industry after Bollywood (India).
What is the wider environmental context in which Nigeria is placed?
-Nigeria spans several agroecological zones (regions where certain crops can grow due to climate)
-Tropical rainforests are found in the South, where crop trees include coffee, palm oil.
-Savannah grasslands are found in the North, with grassland crops such as millet sold (and nomadic cattle graze).
-(This impacts Nigeria’s development because)
-Having different crops to trade means the country’s income from exports is more stable/reliable.
Describe how the economic structure of Nigeria has changed over time.
Trend: Nigeria’s economy has transformed: once based on primary industries, it is now manufacturing & service focused
Evidence: For example, in 1991, 59% of Nigerians worked in Agriculture, but this decreased to 22% by 2022
Anomaly: From 2004 to 2022, the percentage of people working in the industrial sector increased.
The service sector contributes to ____ of the country’s GDP and the industrial sector ____.
50%
27%
Nigeria has the _______ and _______ _______ economy in Africa.
largest
fastest growing
Why does agriculture now have a lower share of Nigeria’s economy?
-Automation
-Better employment opportunities elsewhere
What is the fastest-growing sector in Nigeria?
-Manufacturing
-Due to a cheap and plentiful labour force plus a vast market, within and beyond the country
Does Nigeria have a balanced economy?
(Although Nigeria has a wide-ranging and largely developed economy,) With oil accounting for over 90% of its exports, it cannot be said the country has a balanced economy.
What are the challenges of Nigeria’s changing economic structure?
-Heavy reliance on oil
-Uneven development
Uneven development in Nigeria (industrial structure)
There is regional inequality between the N & S.
“The combined wealth of Nigeria’s 5 richest men could end poverty on a national level” - Oxfam, 2017
Yet 112 million people live below subsistence level (with 5 million starving).
How has Nigeria stimulated economic development through manufacturing?
-Chemical by-products from oil processing have led to the growth of chemical industries.
-New industries developed in the Lekki Free Trade zone to supply parts for existing industries. (adding to the current 100,000 jobs)
-Jobs and taxes provided by these industries are helping the country to develop.
-Regular paid work = securer income = increase in purchasing of products such as electrical appliances, cars, and clothes. (multiplier)
Name some goods manufactured in Nigeria
textiles
leather items
soaps and detergents
processed food
What was Nigeria’s manufacturing industry hindered by historically?
Its dependence on exporting raw materials (palm oil, crude oil from the Niger Delta - 1930s). Processing was mainly done abroad.
BUT with its rapidly growing home market, cheap labour force and improving infrastructure, the sector is expected to grow and become more diverse.
The multiplier effect
An increase in one type of economic activity in a given city or region prompts an increase in demands for goods and services.
This then triggers the development of other types of economic activity in the same city/region.
Political stability since 2011 has attracted more foreign investment. This means that…
…there has been rapid growth in manufacturing industries. This has brought more money into Nigeria because processed goods sell for more money. This has helped to achieve a positive balance of trade. (more exports than imports=profit)
There’s also been rapid growth in tertiary industries like banking and retail.
Lekki Free trade zone
-Outside Lagos
-The normal rules of trade don’t exist here
-This has attracted manufacturers of steel pipes and trucks to hair accessories
-The zone is in partnership with a group of Chinese companies
MINT - fast growing economies suitable for investment
Mexico
Indonesia
Türkiye
NIGERIA
Neo - colonial
The control of less developed countries through indirect means such as economics and trade.
What is a Trans-National Cooperation?
A TNC is a company that operates in two or more countries.
What is the role of TNCs in relation to industrial development?
-To provide employment opportunities = higher wages for local people = more disposable income = positive multiplier effect
-To provide training opportunities - increasing expertise
-To introduce new technology
Why do TNCs locate in foreign countries?
-Cheaper labour/building
-Natural resources
-Weak environmental law enforcement
What does weak environmental law enforcement lead to?
The exploitation of natural resources by TNCs.
How many TNCs operate in Nigeria?
20 including some of the country’s own industries (oil, gas)
Why is Nigeria is attractive to many TNCs?
-The large market on offer
-Lower labour costs
What is the TNC we must focus on?
Shell
Shell as a TNC in Nigeria
-A UK-Dutch company, operates around the world
-Primary (oil extracted), Secondary (oil refined), and tertiary (oil sold e.g. at garages)
-Located in the Niger Delta region, Nigeria
-Produces ≈ 21% of Nigeria’s total petroleum production (from crude oil)
Economic cost of Shell investing in Nigeria
Profit made from oil exports will go to Shell rather than the host country, Nigeria (profit repatriation).
This means that no money is made for investment in healthcare/infrastructure.
Exploitation of workers.
Environmental cost of Shell investing in Nigeria
An estimated 40 million litres of oil are spilled in the Niger Delta annually.
This means that the delta is contaminated, killing fish and preventing the growth of crops.
Which has destroyed many fishing and farming livelihoods.
(you could also mention the Bodo oil spills)
Benefits of Shell investing in Nigeria
Locals don’t have the skills or technology to extract large quantities of oil from the Niger Delta, but the TNC Shell does.
This allows oil industries to uprise, which generates jobs.
This means that the government will get more taxes, which means more money can be invested into schools and hospitals.
Increased disposable income created a positive multiplier effect by allowing other services to grow ( =economic growth).
How many people are directly employed by Shell?
6000
Delta
An area of alluvium at the mouth of a river when it slits up into distributaries.
The changing political relationship between Nigeria and the wider world? (UK)
-Part of the British empire until 1960
-Now a member of the British commonwealth, with equal status to and connections with other countries involved (includes the UK)
Other political links between Nigeria and the wider world
-Part of OPEC, an trade organisation run by 12 members who control the oil market
-Hence, Nigeria have input in stabilising the price of the oil and ensuring a regular supply
-As part of the UN, Nigeria is involved in peace making - it contributed the 5th largest number of troops to the UN peacekeeping force in 2013
The changing trading relationship between Nigeria and the wider world? (UK)
-Britain traded enslaved Africans, taking them to work in America and the Caribbean
-Following the abolition of slavery in 1807, the trade turned to palm oil
-Between 1807 and independence in the 1960s, the trade relationship changed into one where raw materials were imported to Britain then Nigeria imported the manufactured goods
China and Nigeria (trading relationship)
-China is now Nigeria’s leading import partner, with 31.5% of Nigeria’s imports from China
-China has also invested heavily in Nigeria e.g. in the construction of a 1400km railway ($12 billion)
-China benefits from the relationship, receiving oil from Nigeria which is in high demand
Why is trading crude oil important for Nigeria’s trading links?
-Exporting oil has allowed for trading links with the world’s largest economies including the USA, India
-The USA was Nigeria’s biggest customer until 2013
-The highest demand is now from India
What is international aid?
Assistance or resources given to other countries to help reduce the development gap (including advice, technology, food, and money).
Impacts of emergency aid on developing countries?
Prevents deaths and injuries but is only provided for the duration of the emergency
Impacts of long-term aid on developing countries?
-The country can grow economically
-Resources provided can raise people out of poverty
-However, the changes may not be appropriate for the country to sustain
Impacts of bilateral aid on developing countries?
The government can use foreign investment to pay for improvements to infrastructure and services.
But if corrupt, money may be diverted elsewhere e.g. the military, to bolster arms in the country.
Bilateral aid is sometimes conditional (or ‘tied’), requiring the receiving country to purchase goods from the donor country.
Impacts of multilateral aid on developing countries?
The international organisation funds improvements to healthcare etc - unconditionally!
But unless supported by other types of aid, this isn’t sustainable as the country may become dependent.
Bilateral aid
Assistance given by a government directly to the government of another country.
Multilateral aid
Richer governments give money to an international organisation such as the World Bank, which then redistributes the money as aid to poorer countries.
Charitable aid
NGOs such as Oxfam provide bottom-up schemes.
Small and community- based projects are the most successful as intermediate technology teaches people to look after themself, preventing reliance on international aid.
Why does Nigeria require aid?
Despite economic growth, Nigeria still requires targeted aid to address poverty and development challenges, particularly in the north-east region.
What percentage of people in Nigeria live on less than $1 a day?
60%
Bilateral aid example
Nigeria used to be the largest recipient of UK aid, with over £300 million given directly to the government.
Aid from the USA has helped to educate and protect people against the spread of HIV (which can develop into AIDS). This has improved people’s hygiene which has resulted in less sickness.
Multilateral aid example
In 2014, the World Bank (the main donor of multilateral aid) gave $500 million to Nigeria to fund development projects and provide long-term loans to businesses.
This reduced Nigeria’s reliance on oil exports.
Which means that fluctuations in the price of oil have less of an impact on the stability of the country’s economy.
However, this doesn’t address the needs of people whose employment levels ARE affected by fluctuations in the price of oil: they don’t gain control of the market and still receive an unstable income.
Charitable aid example
In 2010, the World Bank funded the building of a new health clinic in the community of Aduwan, Nigeria.
This meant that locals (particularly women) could learn about good hygiene practices and receive immunisations.
Which has resulted in less sickness (for all the family-associations, reduction in infant mortality).
What prevents aid from being used effectively in Nigeria?
-Corrupt government = aid money misused
-Dependence on aid = slowed economic growth
(This is why aid from governments is less successful than aid delivered directly to communities - bottom-up).
Types of international aid
-Bilateral
-Multilateral
-Charitable
-(Emergency)
-(Long term/developmental)
What parts of economic development in Nigeria have lead to environmental impacts?
Mining & oil extraction
Oil spills
Urban Developments
Deforestation
Deforestation in Nigeria (environmental impact of economic development).
Up to 80% of Nigeria’s forests have been destroyed to make room for settlements and large-scale plantations.
This has led to increased soil erosion and the release of greenhouse gases into the atmosphere.
Plantations are mostly monoculture, reducing biodiversity.
What can the leeching of top soil lead to?
A build up of silt in rivers.
Urban Development environmental impacts (Nigeria)
-Loss of countryside to squatter settlements (tightly compacted) and industry
-Water pollution from inadequate sanitation and increased industrial waste - no waste collection in slums
-Increased air pollution and greenhouse gases from growing traffic, especially in Lagos
How many illegal industrial plants in Nigeria? Why is this bad?
100 000
This is bad because growth is fast and unregulated.
Hence these aren’t monitored for emissions or the release of harmful chemicals into watercourses.
Oil Industry Environmental Impacts (Nigeria)
Massive oil spills in the Niger Delta, particularly at Bodo
Contamination of farmland and water tables through the release of toxic chemicals like selenium and mercury.
Air pollution from burning gases during oil extraction.
Respiratory problems or (lead) poisoning for local residents.
Bodo oil spills
In 2008 & 2009
11 million gallons of oil were spilt over an area of 20km²
Who took responsibility for the Bodo oil spills?
Shell took responsibility in 2015, paying £55 million in compensation.
Mining Environmental Impacts (Nigeria)
Mining has caused soil erosion and water pollution.
Deforestation has been needed to clear land.
Has economic development improved the quality of life for people in Nigeria?
Eh.
Despite huge investment from TNCs and governments such as China, almost 2/3 of Nigerians still live in absolute poverty (veryyy low incomes)
And despite the clear improvements, some regions still have limited access to services such as safe water, sanitation, and reliable electricity.
What is absolute poverty?
A set standard in all countries of what’s considered poor.
Usually people living on less than $2 a day.
The north of Nigeria is significantly less developed than the south. What is the evidence for this?
North = Some states here have over 80% in absolute poverty, low health and literacy rates
South = wealthier, better healthcare, higher secondary school attendance
What are differences in quality of life across the different regions of Nigeria?
The north of Nigeria is significantly less developed than the south.
Positive effects of economic development on quality of life?
-Increased literacy rate
-Decreased child mortality rate (U5s)
-Increased life expectancy
-Etc.
Nigeria’s HDI improvement?
0.467 in 2015 to 0.535 in 2021
This reflects improvements in wealth, health, and education.
But ranks them lowwww compared to other countries.
How has life expectancy improved?
1981 - 41 years
2013 - 52.5 years
Due to better access to medicines and more educated doctors.
-Child mortality rate has almost halved during what years?
1981 to 2015
There was a 22% decrease in the number of women who believe it’s ok for a husband to beat his wife from what years?
2003 to 2013
- education of women - if they can work this doubles GDP- elevating their status helps development
-Adult literacy rate has gone from…
55% in 1991 to 59% in 2015
Why is the development of utilities (leccy and vasa) always slow?
It’s difficult to provide a service that isn’t needed.
In Nigeria, 48% had access to electricity in 2010 and 55% in 2012.
What do you use your random Nigeria facts for?
Questions like: evaluate to what extent economic development has improved the quality of life in a LIC or NEE country you have studied. [9]
