TNCs in Nigeria case study

Question 1

Regional importance of Nigeria

Answer 1

• One of the fastest growing economies in Africa
• Highest farm output in Africa
• Most populous African nation and one of the largest youth population in the world

Question 2

Global importance of Nigeria

Answer 2

• One of the biggest oil exporter and producer at around 2 million barells of oil per day
• Movie industry, “nollywood”, is the second largest in the world, behind bollywood
• 5th largest contributor to UN peacekeeping

Question 3

Oil in Nigeria

Answer 3

• The 1950s discovery of the Niger delta led to its transition from an LIC to an NEE
• Oil accounts for 14% of the country’s GDP
• Has a 50 year supply of oil left
• Dependence on oil vulnerable due to changing world oil prices

Question 4

What are Transnational Coorporations?

Answer 4

• Companies that set up factories and operate in foreign countries (usually LICs or NEEs) but have their headquarters elsewhere (HICs)
• TNCs directly invest in one country and later expand to other nations
• They greatly impact a country’s economy through investment
• It’s the process of moving manufacturing around the globe as a result of the development of emerging countries

Question 5

What is shell

Answer 5

• Anglo-Dutch company with its headquarters in Netherlands
• One of the worlds largest oil companies
• Since the discovery of oil in Nigeria, it’s operations in the Niger delta have been controversial

Question 6

Benefits of shell in Nigeria

Answer 6

• Gives 91% of its contracts to Nigerian companies
• Making major contributions to taxes and export revenue
• Provides 65,000 jobs directly
• Provides 250,000 jobs indirectly
• Higher wage jobs
• Introducing new technology to the country

Question 7

Issues of shell in Nigeria

Answer 7

• Most people who live in the area depend on farming or fishing for money
• Oil spills have polluted the surrounding waters, harming fish yields
• Oil spills have caused soil degredation, which has reduced agricultural production
• Oil theft and sabotage have cost the TNCs and the government billions
• Oil flaring is used to burn the gas from the oil. This releases toxic fumes into the atmosphere
• Profit leaves the country and benefits shareholders, often in HICs
• 600,000 barells of oil was leaked in the 2008 Bodo oil spill, wasn’t cleaned up until 3 years later

Question 8

What is the NNPC and what does it do?

Answer 8

• The Nigerian National Pertroleum Corporation
• Joins with TNCs to monitor the oil industry
• Ensures that part of the profit from the industry stays in Nigeria

Question 9

How are Nigeria’s political relationships changing?

Answer 9

• Nigeria used to be a part of the British empire, meaning political and trade connections were primarily with the UK
• After independence, Nigeria has remained a part of the commonwealth, expanding ties with Asia and USA
• Nigeria’s relations with China are on the rise

Question 10

How are Nigeria’s trading relationships changing?

Answer 10

• Nearly half of Nigeria’s exports are to the EU
• Despits still trading with the UK, Nigeria conducts most of its trade with EU, USA and India
• Oil has become Nigeria’s biggest export
• The country still exports oil and imports refined oil as it does not have the ability to meet its own fuel demand

Question 11

Disadvantages of international aid

Answer 11

• Does not always reach the people who need it due to corruption
• Countries may become dependent on aid and development may stall
• Aid is often tied, meaning a country has to spend the money on something
• The donor country can apply economic or political pressure
• Food and water can cost more

Question 12

Nigeria’s aid

Answer 12

• 4% of all African aid goes to Nigeria
• Corruption in the government has meant that some of the aid has failed to reach those who need it

Question 13

Environmental impacts of economic development in Nigeria

Answer 13

• Rapid industrial growth in Nigeria has led to environmental impacts
• Urban growth has led to a rise in squatter settlements and traffic congestion. This leads to increased emission of harmful gases which contribute to climate change
• Mining and oil extraction - Bodo oil spill, shell has reported 1010 oil leaks since 2011
• Industries releasing chemical waste onto nearby land
• Industrial farming has led to soil degredation and desertification

Question 14

Effect of development on quality of life in Nigeria

Answer 14

• Reliable and better paid jobs provide security
• HDI has increased by 0.07 since 2005
• Improved living conditions provide better performance at school
• Better quality healthcare has lead to the life expectancy increasing by 10 years
• Improvements to safe drinking water increases overall health
• Over 70% of Nigerian’s now have a phone