Nigeria Essay ⋆ Business Essay Examples ⋆ EssayEmpire

The west African country of Nigeria was a major economic power when the British invaded and occupied parts of the country from 1861. Nigeria gained its independence in 1960. With a population of 135 million and covering 923,700 sq. km, it still dominates—politically and economically—much of west Africa.

In the early 17th century, European powers started to establish trading posts along the coast of what is now Nigeria. Initially, some of these posts were for trading with the local people, but soon the English and other Europeans started the slave trade. The Company of the Royal Adventurers was chartered in 1660, succeeded 12 years later by the Royal Africa Company. Along the coast, trading posts were replaced by English and Dutch forts where slaves were held before being transported to the Americas.

During the Napoleonic Wars, following the French invasion of the Netherlands, the British broke the hold of the Dutch. By the middle of the 19th century, most of the British trade was focused on the area around Lagos and the delta of the River Niger. This trade coincided with many wars in the region among different tribes. With the abolition of the slave trade, the British started expanding into plantation agriculture, dealing in palm oil, and also attempting to secure sources of oil and ivory.

The British started ruling Nigeria in 1861, with Lagos becoming a crown colony. Ostensibly, the aim was to prevent illegal slave trading and also involvement in the Yoruba civil wars. In 1900 the Protectorate of Northern Nigeria was established. By 1906 the whole of Nigeria was under British control, with the colony of Lagos being incorporated into the Protectorate of Southern Nigeria. In 1914 the Northern and Southern protectorates were merged. The economic focus of the country was on growing cash crops and exploiting raw materials and minerals to help industrial development in Europe.

In the 1890s a railway was built, and in the late 1920s, roads were improved, thereby helping create a wealthy elite in Nigeria that started consuming British manufactured exports. The pound sterling became the medium of exchange. As a result, many British companies and some local firms started mining tin; growing cotton, cocoa, and groundnuts; and continuing palm oil plantations. As a result of increasing wealth in Nigeria, many British and other agency houses operated in the country, and many Nigerians enlisted in the British armed forces during World War I and World War II. During the latter conflict, agitation for independence increased, and in 1945, a large 40-day strike crippled the country’s economy. The British made many concessions, and Nigeria started preparing for independence. After experiments in federalism, independence was granted in 1960.

Political problems started in 1962 along tribal lines. In 1966 the military staged a coup d’état, which was followed by countercoups. In May 1967 Lt. Col. Odemegwu Ojukwa urged autonomy for eastern Nigeria, which then formally seceded as the Republic of Biafra. This secession led to a civil war from May 1967 to January 1970, in which tens of thousands of people were killed or died of starvation or lack of medical supplies. It ended with defeat for Biafra.

Oil and Natural Gas

The oil crisis of 1973 and 1974 led to a financial windfall for Nigeria—so much so that in 1975, about 90 percent of the export revenue of the country came from oil. Soon afterward, deposits of natural gas were found. At the same time, coal production fell; it had been 940,000 tons a year in 1958 but was only 73,000 tons in 1986, when it made up less than 1 percent of the country’s energy.

The wealth in Nigerian oil led to more disputes and military coups, which in turn led to a succession of military leaders, some of whom were involved in widespread corruption and graft. Although Western companies were eager to do business with Nigeria owing to the wealth there, many were nervous about the government’s poor human rights records.

Despite the oil deposits, some 70 percent of the workforce is still involved in agriculture, although it accounts for only 27 percent of the nation’s gross domestic product (GDP). Industry, especially oil, employs 10 percent of the workforce and generates 49 percent of Nigeria’s GDP. The service sector accounts for 20 percent of the workforce and produces 24 percent of the GDP.

Oil and petroleum products make up 95 percent of the country’s exports, with most of the remainder coming from cocoa and rubber. Some 46 percent of the exports go to the United States, with India and Spain being other major importers of Nigerian oil. Imports—especially of manufactured goods, machinery, transportation equipment, food, and live animals—come from many countries, with 9 percent from the United States and 8 percent from both China and the United Kingdom.

Bibliography:

Claude Abe, ed., Political Economy of Nigeria (Longman, 1985);
S. P. Alamieyeseigha, Steve S. Azaiki, and Augustine A. Ikein, Oil, Democracy, and the Promise of True Federalism in Nigeria (University Press of America, 2008);
Olufemi Amao and Kenneth Amaeshi, “Galvanising Shareholder Activism: A Prerequisite for Effective Corporate Governance and Accountability in Nigeria,” Journal of Business Ethics (v.82/1, 2008);
Soala Ariweriokuma, The Political Economy of Oil and Gas in Africa: The Case of Nigeria (Routledge, 2008);
Emmanuel A. Erondu, Alex Sharland, and John O. Okpara, “Corporate Ethics in Nigeria: A Test of the Concept of Ethical Climate,” Journal of Business Ethics (v.51/4, 2004);
Peter Kilby, Industrialization in an Open Economy: Nigeria, 1945–1966 (Cambridge University Press, 2008);
A. Oduola, M. O. IIori, and J. B. Akarakiri, “Capability Building and Business Development Practices in the Public Research and Development Organisations in Nigeria,” South African Journal of Economic and Management Sciences (v.9/4, 2006);
K. Onoh, The Nigerian Oil Economy: From Prosperity to Glut (Croom Helm, 1983);
Scott R. Pearson, Petroleum and the Nigerian Economy (Stanford University Press, 1970);
Chad Steinberg, Stephen Swaray, and Jennifer Moyo, Nigeria: Selected Issues (International Monetary Fund, 2008).

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