The Changing Economic World NEE Case Study: Nigeria Flashcards
Where is Nigeria?
In West Africa, just above the equator on the Gulf of Guinea. It is over three times larger than the UK and borders Benin, Niger, Chad, and Cameroon
What is Nigeria’s population and growth rate like?
2017 population: 190 million (the largest in Africa and seventh largest in the world)
Rapid growth rate at 2.6%/year. By 2050 the estimated population will be 390 million, the fourth largest country in the world.
Why is Nigeria’s population growing?
It is a NEE, in stage 3 of the demographic transition model, so it has a high birth rate and a low death rate. It has a large young population so the rate of natural increase is high.
Why and by how much is Nigeria’s economy predicted to grow?
By 2020 it should become one of the world’s top twenty economies.
It has a youthful population with a high proportion of educated young people due to start working in the next twenty years, providing lots of skilled labour for manufacturing.
What is Nigeria’s GNI per capita according to the World Bank?
US$2100
What is Nigeria’s HDI ranking?
0.532 - 157th
What is Nigeria’s GDP breakdown per sector?
Services - 52% Agriculture - 22% Oil and gas - 14% Manufacturing - 7% Other - 5%
What is the ethnic mix in Nigeria?
There are more than 500 different ethnic groups, but the three major ones are the Yoruba in the south west (encompassing Lagos), the Igbo in the south east, and the Hausa in the north. The south is mostly Christian, while the north is mostly Muslim.
How does the vegetation and climate change throughout Nigeria?
As you go north, the climate becomes drier. In the hot, humid south there are tropical rainforests and in the hot, dry north there is savanna grassland. Desertification in the north is turning some vegetation into desert. Much of the natural vegetation has been replaced by agriculture, such as coco, palm oil, and peanuts, with agriculture more common in the north.
What is Boko Haram?
An extremest group active in the north of Nigeria, which wants to abolish democracy and set up a government under its own version of Sharia Law. They gained notoriety in 2014 when they kidnapped over 200 schoolgirls, over half of whom are still missing. At least 17,000 people have been killed in the conflict since 2002 and over 500,000 have fled.
How did the 2014 Ebola outbreak affect Nigeria?
Despite over 11,000 people dying in West Africa, only 8 people died in Nigeria thanks to good healthcare and planning, involving tracing and screening for the disease. Other countries have since copied Nigeria’s method.
What are some issues hindering Nigeria’s development?
Corruption in the oil industry and a failure to reinvest profits have prevented it from developing fully, despite Nigeria being Africa’s largest producer
About 1/4 of the working aged population is unemployed as a result of a 2016 recession
Boko Haram remains active in the north east
Power shortages
Why is it significant that Muhammadu Buhari won Nigeria’s latest presidential election?
He previously ruled as a military general in the 1980s, taking power in a military coup d’état. He calls himself a ‘converted democrat’ but there are concerns over corruption
What were Nigeria’s traditional sources of income?
Agricultural products e.g. cocoa, timber, groundnuts
Oil, after it was discovered in the Niger Delta in the 1950s
Exports to Britain under colonial rule
What are Nigeria’s more recent sources of income?
Oil - 9% of GDP and 95% of all export earnings
Manufacturing and services e.g. telecommunications, retail, and Nollywood (in Lagos services account for 95% of GDP)
Cement manufacturing e.g. Dangote Cement
What is the economic situation like in Nigeria?
GNI per capita is US$2100
Most people are poor, with 60% living on
Why is Nigeria’s economy developing?
Industrial development and the diversification of the economy
The growth of services and manufacturing industries
Small businesses that once were in the informal economy are now in the formal economy and are included in GDP figures
Increases expertise and investment from TNCs
Trading relationships and foreign investment
Aid and debt relief
How has Nigeria’s economy diversified and become more balanced?
Rapid advances in technology
Many English speakers so potential for growth in telecommunications
IT beginning to drive the economy rather than oil so Nigeria can benefit from global finance and trade
Investment in science and technology training
How has Nigeria’s oil industry changed?
Dependence on oil means being vulnerable to changes in the world oil price - in 2015 prices fell and the economy was damaged
It is a member of OPEC
While the USA used to be Nigeria’s biggest suppliers, now more exports are to India and Europe
How is Dangote Cement helping Nigeria to develop?
Cement is crucial for urbanisation as it is used in infrastructure. It makes better quality roads, which reduce the likelihood of accidents and breakdowns
It has made some people very wealthy, such as Aliko Dangote, Africa’s richest man
It has expanded into other countries - a US$1bn factory was made to enable exports, creating money and relationships through trade
It reduces the need for imports
The new factory will employ over 2000 people
What is a TNC?
A large company that operates in several countries, usually with its headquarters in one country with production plants in several others
What are some TNCs that operate in Nigeria?
Shell, Guinness, Unilever, Nestlé, GlaxoSmithKline, and KFC
What are some advantages of TNCs operating in Nigeria?
Companies provide employment and the development of new skills
More money is invested in infrastructure and education
Other countries benefit from increased orders
Valuable export revenues are earned
Some TNCs bring along charities e.g. the Shell Foundation to help the local area
What are some disadvantages of TNCs operating in Nigeria?
Local workers are sometimes poorly paid
Working conditions are sometimes very poor
Management jobs often go to foreign employees brought in by the TNC
Much of the profit goes abroad
Grants and subsidies to attract TNCs could have been used elsewhere
Why are TNCs operating in the Niger Delta?
The Niger Delta is one of the most difficult areas in the world from which to extract oil. TNCs are using their money and expertise to get access to this oil.
What are the benefits of oil companies operating in the Niger Delta?
Money is made through taxes and export revenue
Direct employment is provided for 65,000 workers, with a further 250,000 jobs in related industries
91% of Shell contracts are given to Nigerian companies
Supporting the growth of Nigeria’s energy sector
What are the costs of oil companies operating in the Niger Delta?
Oil spills have caused 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 e.g. The Movement for the Emancipation of the Niger Delta
Oil theft and sabotage reduce production and cost TNCs and the government billions of dollars
How are Nigeria’s trade relationships developing?
Nigeria still trades with the UK, but its largest trading partners are now China, India, and EU countries
Oil is now the largest export
How is China influencing Africa’s economy and what are its demands?
The China Railway Construction Corporation won a US$12bn contract in 2014 to build a 1400km railway on Nigeria’s coast
China needs lots of resources so is buying oil
China has promised $40bn in investments and projects for Nigeria
China persuaded Nigeria to pressure Taiwan to move its trade office, its unofficial embassy, from Abuja to Lagos
Why does Nigeria need aid?
It cannot stop all violent conflict in the country, with Boko Haram still active and attacks on oil sites
About 1/3 of the population lives below the poverty line, with another 1/3 just above it
Electricity supply is irregular, making it hard to develop industry and do business
Only 57% of girls in northern Nigeria attend primary school and less than 25% attend secondary school
Nigeria has to import food
What is Nigeria’s debt timeline?
1960 - independence and booming economy
1970s - economic slump and oil crisis, Nigeria borrowed lots of money
1980-1990s - debt crisis, as debt could not be repaid. By 1990 Africa’s most indebted country, with US$36bn in debt
2005 - lots of debt from Highly Indebted Poor Countries (HIPCs) written off, including Nigeria
What aid does Nigeria receive?
Official Development Assistance as multilateral aid to prevent diseases like malaria and facilitate development UK aid (£1.14bn from 2013-2018) to fund elections, help people access financial services, help childbirth, prevent malaria (10 million nets given out), education, water sanitation, and poor pregnant mothers.
What are some arguments against giving Nigeria aid?
Nigeria is Africa’s largest economy; other countries like South Sudan could need it more
Corruption is still an issue so aid could be mismanaged
The economy could become reliant on UK aid
Nigeria has its own space agency despite rampant poverty so could be seen as mismanaging its money
What is the African Central Bank?
A financial institution the African Union found in Abuja. It is planned to issue the African Single Currency, giving it power over interest and exchange rates and supervising the banking industry.
Where does Nigeria place on the Democracy Index?
108th, at 4.44 out of 10, making it a ‘hybrid regime’ between democracy and authoritarianism
What is the Lekki Free Trade Zone?
An 155km zone in Lekki, a city near Lagos, that aims to become a new modern city by facilitating free trade. Dangote Refinery, a $15bn oil refinery owned by the Dangote Group, is being built there, with the capacity to process ~650,000 barrels of crude oil per day.
What is the Movement for the Emancipation of the Niger Delta?
A militant group focussed on crippling oil production in the Niger Delta, saying it increases inequalities, corruption, and harms the environment. They use attacks on workers, police, and oil sites to achieve this. They have been less active since a ceasefire in 2014
