The Niger River enters the country in the northwest and flows southward through tropical rain forests and swamps to its delta in the Gulf of Guinea. Southern lowlands merge into central hills and plateaus, with mountains in southeast and plains in north.
Nigeria's major environmental issues include:
- soil degradation;
- rapid deforestation;
- urban air and water pollution;
- oil pollution - water, air, and soil;
- damage from oil spills;
- loss of arable land; and,
- rapid urbanization.
It is also susceptible to periodic droughts and flooding.
British influence and control over what would become Nigeria grew through the 19th century. A series of constitutions after World War II granted Nigeria greater autonomy; independence came in 1960.
Following nearly 16 years of military rule, a new constitution was adopted in 1999, and a peaceful transition to civilian government was completed.
The government continues to face the daunting task of reforming a petroleum-based economy, whose revenues have been squandered through corruption and mismanagement, and institutionalizing democracy.
In addition, Nigeria continues to experience longstanding ethnic and religious tensions.
Although both the 2003 and 2007 presidential elections were marred by significant irregularities and violence, Nigeria is currently experiencing its longest period of civilian rule since independence. The general elections of April 2007 marked the first civilian-to-civilian transfer of power in the country's history.
Geographic Coordinates: 10 00 N, 8 00 E
Area: 923,768 km2 (910,768 km2 land and 13,000 km2 water)
Coastline: 853 km
territorial sea: 12 nm
exclusive economic zone: 200 nm
continental shelf: 200 m depth or to the depth of exploitation
Natural Hazards: periodic droughts; flooding
Terrain: Southern lowlands merge into central hills and plateaus; mountains in southeast, plains in north. Its lowest point is Atlantic Ocean (0 metres) and its highest point is Chappal Waddi (2,419 metres).
Climate: Varies; equatorial in south, tropical in center, arid in north
Topography of Nigeria. Source: Wikimedia Commons
Satellite view of Nigeria. Source: The Map Library
Ecology and Biodiversity
Source: World Wildlife Fund
1. Sahelian Acacia savanna
2. Lake Chad flooded savanna
3. West Sudanian savanna
4. Mandara Plateau mosaic
5. East Sudanian Savanna
6. Guinean forest-savanna mosaic
7. Cameroonian Highlands forests
8. Nigerian lowland forests
9. Niger Delta swamp forests
10. Cross-Niger transition forests
11. Cross-Sanaga-Bioko coastal forests
12. Central African mangroves
13. Jos Plateau forest-grassland mosaic
People and Society
Population: 170,123,740 (July 2012 est.)
Ethnic groups: Nigeria, Africa's most populous country, is composed of more than 250 ethnic groups; the following are the most populous and politically influential: Hausa and Fulani 29%, Yoruba 21%, Igbo (Ibo) 18%, Ijaw 10%, Kanuri 4%, Ibibio 3.5%, Tiv 2.5%
The most populous country in Africa, Nigeria accounts for over half of West Africa's population. Although less than 25% of Nigerians are urban dwellers, at least 24 cities have populations of more than 100,000. The variety of customs, languages, and traditions among Nigeria's 250 ethnic groups gives the country a rich diversity. The dominant ethnic group in the northern two-thirds of the country is the Hausa-Fulani, most of whom are Muslim. Other major ethnic groups of the north are the Nupe, Tiv, and Kanuri. The Yoruba people are predominant in the southwest.
About half of the Yorubas are Christian and half Muslim. The predominantly Catholic Igbo are the largest ethnic group in the southeast, with the Efik, Ibibio, and Ijaw comprising a substantial segment of the population in that area. Persons of different language backgrounds most commonly communicate in English, although knowledge of two or more Nigerian languages is widespread. Hausa, Yoruba, Igbo, Fulani, and Kanuri are the most widely used Nigerian languages.
0-14 years: 40.9% (male 32,476,681/female 31,064,539)
15-64 years: 55.9% (male 44,296,228/female 42,534,542)
65 years and over: 3.1% (male 2,341,228/female 2,502,355) (2011 est.)
Population Growth Rate: 2.553% (2012 est.)
Birth Rate: 39.23 births/1,000 population (2012 est.)
Death Rate: 13.48 deaths/1,000 population (July 2012 est.)
Net Migration Rate: -0.22 migrant(s)/1,000 population (2012 est.)
Life Expectancy at Birth: 52.05 years
male: 48.95 years
female: 55.33 years (2012 est.)
Total Fertility Rate: 5.38 children born/woman (2012 est.)
Languages: English (official), Hausa, Yoruba, Igbo (Ibo), Fulani
Literacy (2003 est.): 68% (male: 75.7% - female: 60.6%)
Urbanization: 50% of total population (2010) growing at a 3.5% annual rate of change (2010-15 est.)
In the northern cities of Kano and Katsina, recorded history dates back to about 1000 AD. In the centuries that followed, these Hausa kingdoms and the Bornu empire near Lake Chad prospered as important terminals of north-south trade between North African Berbers and forest people who exchanged slaves, ivory, and kola nuts for salt, glass beads, coral, cloth, weapons, brass rods, and cowrie shells used as currency.
In the southwest, the Yoruba kingdom of Oyo was founded about 1400, and at its height from the 17th to 19th centuries attained a high level of political organization and extended as far as modern Togo. In the south central part of present-day Nigeria, as early as the 15th and 16th centuries, the kingdom of Benin had developed an efficient army; an elaborate ceremonial court; and artisans whose works in ivory, wood, bronze, and brass are prized throughout the world today. In the 17th through 19th centuries, European traders established coastal ports for the increasing traffic in slaves destined for the Americas. Commodity trade, especially in palm oil and timber, replaced slave trade in the 19th century, particularly under anti-slavery actions by the British Navy. In the early 19th century the Fulani leader, Usman dan Fodio, promulgated Islam and brought most areas in the north under the loose administrative control of an empire centered in Sokoto.
A British Sphere of Influence
Following the Napoleonic wars, the British expanded trade with the Nigerian interior. In 1885, British claims to a sphere of influence in that area received international recognition and, in the following year, the Royal Niger Company was chartered. In 1900, the company's territory came under the control of the British Government, which moved to consolidate its hold over the area of modern Nigeria. In 1914, the area was formally united as the "Colony and Protectorate of Nigeria."
The United Kingdom administered northern and southern Nigeria separately, as northern leaders retained their religion-based administrative structures under an “indirect rule” arrangement with colonial authorities. Western influence and education proceeded more rapidly in the south than in the north, with the social, cultural, and political consequences still evident today. Following World War II, Nigerian nationalism and demands for independence resulted in successive constitutions legislated by the British Government moving Nigeria toward representative self-government.
Nigeria gained full independence in October 1960, as a federation of three regions (northern, western, and eastern) under a constitution that provided for a parliamentary form of government. Under the constitution, each of the three regions retained a substantial measure of self-government. The federal government was given exclusive powers in defense and security, foreign relations, and commercial and fiscal policies. In October 1963, Nigeria altered its relationship with the United Kingdom by proclaiming itself a federal republic and promulgating a new constitution. A fourth region (the midwest) was established that year.
On January 15, 1966, a small group of army officers, mostly southeastern Igbos, overthrew the government and assassinated the federal prime minister and the premiers of the northern and western regions. The federal military government that assumed power was unable to address ethnic tensions or produce a constitution acceptable to all sections of the country. Its efforts to abolish the federal structure greatly raised tensions and led to another coup in July. The coup-related massacre of thousands of Igbo in the north prompted hundreds of thousands of them to return to the southeast, where increasingly strong Igbo secessionist sentiment emerged.
In a move that gave greater autonomy to minority ethnic groups, the military divided the four regions into 12 states. The Igbo rejected attempts at constitutional revisions and insisted on full autonomy for the east. Finally, in May 1967, Lt. Col. Emeka Ojukwu, the military governor of the eastern region, who emerged as the leader of increasing Igbo secessionist sentiment, declared the independence of the eastern region as the "Republic of Biafra." The ensuing civil war was bitter and bloody, ending in the defeat of Biafra in 1970.
Following the civil war, reconciliation was rapid and effective, and the country turned to the task of economic development. Foreign exchange earnings and government revenues increased spectacularly with the oil price rises of 1973-74. On July 29, 1975, Gen. Murtala Muhammed and a group of fellow officers staged a bloodless coup, accusing Gen. Yakubu Gowon's military government of delaying the promised return to civilian rule and becoming corrupt and ineffective. General Muhammed replaced thousands of civil servants and announced a timetable for the resumption of civilian rule by October 1, 1979. Muhammed also announced the government's intention to create new states and to construct a new federal capital in the center of the country.
General Muhammed was assassinated on February 13, 1976, in an abortive coup. His chief of staff, Lt. Gen. Olusegun Obasanjo, became head of state. Obasanjo adhered meticulously to the schedule for return to civilian rule, moving to modernize and streamline the armed forces and seeking to use oil revenues to diversify and develop the country's economy. Seven new states were created in 1976, bringing the total to 19. The process of creating additional states continued until, in 1996, there were 36.
The Second Republic
A constituent assembly was elected in 1977 to draft a new constitution, which was published September 21, 1978, when the ban on political activity, in effect since the advent of military rule, was lifted. Political parties were formed, and candidates were nominated for president and vice president, the two houses of the National Assembly, governorships, and state houses of assembly. In 1979, five political parties competed in a series of elections in which a northerner, Alhaji Shehu Shagari of the National Party of Nigeria (NPN), was elected president. All five parties won representation in the National Assembly.
In August 1983, Shagari and the NPN were returned to power in a landslide victory, with a majority of seats in the National Assembly and control of 12 state governments. But the elections were marred by violence, and allegations of widespread vote rigging and electoral malfeasance led to legal battles over the results.
On December 31, 1983, the military overthrew the Second Republic. Maj. Gen. Muhammadu Buhari emerged as the leader of the Supreme Military Council (SMC), the country's new ruling body. He charged the civilian government with economic mismanagement, widespread corruption, election fraud, and a general lack of concern for the problems of Nigerians. He also pledged to restore prosperity to Nigeria and to return the government to civilian rule but was stymied in his attempt to deal with Nigeria's severe economic problems. Despite relative popularity for its no-nonsense approach in tackling corruption, the Buhari government was peacefully overthrown by the SMC's third-ranking member, Army Chief of Staff Maj. Gen. Ibrahim Babangida, in August 1985.
Babangida moved to restore freedom of the press and to release political detainees being held without charge. As part of a 15-month economic emergency, he announced stringent pay cuts for the military, police, and civil servants and enacted similar cuts for the private sector. Imports of rice, corn, and wheat were banned. Babangida orchestrated a national debate on proposed economic reform and recovery measures, which reportedly convinced him of intense opposition to an economic recovery package dependent on an International Monetary Fund (IMF) loan.
The Abortive Third Republic
In early 1989, a constituent assembly completed work on a constitution for the Third Republic, and political activity again was permitted. In April 1990, mid-level officers tried and failed to overthrow Babangida, and 69 accused coup plotters were later executed after secret trials before military tribunals. In December 1990 the first stage of partisan elections was held at the local government level, followed by gubernatorial and state legislative elections in December 1991; elections were peaceful but turnout was low. However, Babangida canceled primaries scheduled for August and September 1992 due to fraud. All announced candidates were disqualified from again standing for president once a new election format was selected. After delayed promises for elections in 1990, the government finally held a presidential election on June 12, 1993.
In what most observers deemed to be Nigeria's fairest elections, early returns indicated that wealthy Yoruba businessman M.K.O. Abiola had won a decisive victory. But on June 23, Babangida, using several pending lawsuits as a pretense, annulled the election, throwing Nigeria into turmoil. More than 100 persons were killed in riots before Babangida agreed to hand power to an "interim government" on August 27. Babangida then attempted to renege on his decision. Without popular and military support, he was forced to hand over to Ernest Shonekan, a prominent nonpartisan businessman. Shonekan was to rule until new elections, slated for February 1994. Although he had led Babangida's Transitional Council since early 1993, Shonekan was unable to reverse Nigeria's ever-growing economic problems or to defuse lingering political tension.
With the country sliding into chaos, Defense Minister Sani Abacha quickly assumed power and forced Shonekan's "resignation" on November 17, 1993. Abacha dissolved all democratic political institutions and replaced elected governors with military officers. Abacha promised to return the government to civilian rule but refused to announce a timetable. Following the annulment of the June 12 election, the United States and other nations imposed various sanctions on Nigeria, including restrictions on travel by government officials and their families and suspension of arms sales and military assistance. Additional sanctions were imposed as a result of Nigeria's failure to gain full certification for its counternarcotics efforts.
Although Abacha's takeover was initially welcomed by many Nigerians, disenchantment grew rapidly. Many opposition figures formed the "National Democratic Coalition (NADECO)" to campaign for an immediate return to civilian rule, and most Nigerians boycotted the May 1994 polls for delegates to a government-sponsored Constitutional Conference. On June 11, 1994, using the groundwork laid by NADECO, Abiola declared himself president and went into hiding. He reemerged and was promptly arrested on June 23. A series of strikes by petroleum workers and other unions initially brought economic life in Lagos and the southwest to a standstill, but by mid-August Abacha had dismissed the national union leadership, arrested his opponents, closed media houses, and moved strongly to curb dissent. In early 1995, Abacha alleged that some 40 military officers and civilians were engaged in a coup plot, including former head of state Obasanjo and his deputy, retired Gen. Shehu Musa Yar'Adua. After a secret tribunal, most of the accused were convicted, and several death sentences were handed down. The tribunal also charged, convicted, and sentenced prominent human rights activists, journalists, and others--including relatives of the coup suspects--for their alleged "anti-regime" activities.
In an October 1, 1995 address to the nation, Gen. Sani Abacha announced the timetable for a 3-year transition to civilian rule. Public turnout for his sham local elections in December 1997 and in April 1998 state assembly and gubernatorial elections was under 10%, and public reaction to Abacha's presidential nomination by the five accepted parties was apathy and a near-complete boycott. Widely expected to succeed himself as a civilian president on October 1, 1998, he remained head of state until his death on June 8 of that year. During the Abacha regime, the government continued to enforce its arbitrary authority through the federal security system--the military, the state security service, and the courts. Under Abacha, all branches of the security forces committed serious human rights abuses. Abacha was replaced by General Abdulsalami Abubakar, who subsequently released almost all known civilian political detainees and decreased the number of reported human rights abuses.
Abubakar's Transition to Civilian Rule
During both the Abacha and Abubakar eras, Nigeria's main decision-making organ was the exclusively military Provisional Ruling Council (PRC) which governed by decree. The PRC oversaw the 32-member Federal Executive Council composed of civilians and military officers. Pending the promulgation of the constitution written by the constitutional conference in 1995, the government observed some provisions of the 1979 and 1989 constitutions. Neither Abacha nor Abubakar lifted the decree suspending the 1979 constitution, and the 1989 constitution was not implemented. The judiciary's authority and independence was significantly impaired during the Abacha era by the military regime's arrogation of judicial power and prohibition of court review of its action. The court system continued to be hampered by corruption and lack of resources after Abacha's death. In an attempt to alleviate such problems, Abubakar's government implemented a civil service pay raise and other reforms.
In August 1998, the Abubakar government appointed the Independent National Electoral Commission (INEC) to conduct elections for local government councils, state legislatures and governors, the National Assembly, and president. INEC held a series of four successive elections between December 1998 and February 1999. Former military head of state Olusegun Obasanjo, freed from prison by Abubakar, ran as a civilian candidate and won the presidential election. Irregularities marred the vote, and the defeated candidate, Chief Olu Falae, challenged the electoral results and Obasanjo's victory in court.
The PRC promulgated a new constitution, based largely on the suspended 1979 constitution, before the May 29, 1999 inauguration of the new civilian president. The constitution included provisions for a bicameral legislature, the National Assembly, consisting of a 360-member House of Representatives and a 109-member Senate. The executive branch and the office of president retained strong federal powers. The legislature and judiciary, having suffered years of neglect, needed to rebuild as institutions and begin exercising their constitutional roles in the balance of power.
The Obasanjo Administration
The emergence of a democratic Nigeria in May 1999 ended 16 years of consecutive military rule. Olusegun Obasanjo became the steward of a country suffering economic stagnation and the deterioration of most of its democratic institutions. Obasanjo, a former general, was admired for his stand against the Abacha dictatorship, his record of returning the federal government to civilian rule in 1979, and his claim to represent all Nigerians regardless of religion.
The new President took over a country that faced many problems, including a dysfunctional bureaucracy, collapsed infrastructure, and a military that wanted a reward for returning quietly to the barracks. The President moved quickly and retired hundreds of military officers who held political positions, established a blue-ribbon panel to investigate human rights violations, ordered the release of scores of persons held without charge, and rescinded a number of questionable licenses and contracts let by the previous military regimes. The government also moved to recover millions of dollars in funds secreted in overseas accounts.
Most civil society leaders and most Nigerians saw a marked improvement in human rights and democratic practice under Obasanjo. The press enjoyed greater freedom than under previous governments. As Nigeria worked out representational democracy, there were conflicts between the executive and legislative branches over major appropriations and other proposed legislation. A sign of federalism was the growing visibility of state governors and the inherent friction between Abuja and the various state capitols over resource allocation.
In the years following the end of military rule, Nigeria witnessed recurrent incidents of ethno-religious and community conflicts, many of which derived from distorted use of oil revenue wealth, flaws in the 1999 constitution, and longstanding disputes over the distribution of land and other resources. In May 1999, violence erupted in Kaduna State over the succession of an Emir, resulting in more than 100 deaths. In November 1999, the army destroyed the town of Odi in Bayelsa State and killed scores of civilians in retaliation for the murder of 12 policemen by a local gang. In Kaduna in February-May 2000 over 1,000 people died in rioting over the introduction of criminal Shar'ia in the state. Hundreds of ethnic Hausa were killed in reprisal attacks in southeastern Nigeria. In September 2001, over 2,000 people were killed in inter-religious rioting in Jos. In October 2001, hundreds were killed and thousands displaced in communal violence that spread across the Middle-Belt states of Benue, Taraba, and Nasarawa. On October 1, 2001, President Obasanjo announced the formation of a National Security Commission to address the issue of communal violence. In 2003, he was re-elected in contentious and highly flawed national elections and state gubernatorial elections, which were litigated over 2 years. Since 2006, violence, destruction of oil infrastructure, and kidnappings of primarily expatriates in the oil-rich Niger River Delta have intensified as militants demanded a greater share of federal revenue for states in the region, as well as benefits from community development. For many reasons, Nigeria's security services have been unable to respond effectively to the security threat, which is both political and criminal.
In May 2006, the National Assembly soundly defeated an attempt to amend the constitution by supporters of a third presidential term for President Obasanjo. This measure was packaged in a bundle of what were otherwise non-controversial amendments. Nigeria's citizens addressed this issue in a constitutional, democratic, and relatively peaceful process.
Nigeria held state legislative and gubernatorial elections on April 14 as well as presidential and national legislative elections on April 21, 2007, in which more than 35 political parties participated. U.S. and international observers reported overall a seriously flawed process with credible reports of malfeasance and vote rigging in some constituencies. The scope of violence that occurred also was regrettable. There were considerable degrees of difference in the conduct of elections among states, but serious differences were also observed within states during the two polling dates. The main opposition parties, All Nigeria People's Party (ANPP) and the Action Congress (AC), as well as numerous smaller political parties and the ruling People's Democratic Party (PDP) filed petitions to challenge the results of gubernatorial elections in 34 of Nigeria's 36 states. The Court of Appeal received 1,527 petitions, a tripling of the 527 petitions filed and received in 2003. Nigeria's National Electoral Commission (INEC) experienced significant problems, including politicization and lack of independence; lack of transparency in its operations and decision-making; and persistent failure to make adequate logistical arrangements for both voter registration and polling. However, Nigeria experienced its first transition of power between civilian administrations when President Obasanjo stepped down on May 29, 2007. Newly-elected President Umaru Yar'Adua, a respected governor from the northern state of Katsina, pledged publicly to make peace and security in the Niger Delta and continued electoral reform his top priorities.
While much reform remained unimplemented, the Yar'Adua administration showed restraint in allowing the legislative and judicial branches to operate relatively freely. In October 2007 Patricia Etteh, the Speaker of the Federal House of Representatives, resigned over allegations of corruption, after intense legislative and public pressure. Of significance for Nigeria's system of checks and balances and the rule of law, on November 12, 2008 an appeals court upheld a lower court ruling that approved an opposition party's gubernatorial election appeal, effectively unseating the ruling party's incumbent in favor of the opposition candidate. By a 4-3 vote, Nigeria’s Supreme Court on December 12, 2008 upheld the results of the presidential election and dismissed the appeals of the two other primary contenders.
On November 23, 2009, President Yar’Adua was flown to Jeddah, Saudi Arabia for emergency medical treatment. After a prolonged absence, on February 9, 2010 the Nigerian National Assembly passed a resolution that transmitted presidential power to Vice President Goodluck Jonathan, giving him the title and responsibilities of Acting President. On March 17, 2010, Acting President Goodluck Jonathan dissolved the country's cabinet, and swore in new cabinet ministers on April 6, 2010. Following the death of President Yar’Adua on May 6, 2010, the Nigerian Chief Justice swore in Goodluck Jonathan as President.
Government Type: Federal Republic
The 1999 constitution provides for a bicameral National Assembly consisting of a 360-member House of Representatives and a 109-member Senate. The president heads the executive branch. The judiciary includes a Supreme Court and lower courts.
In April 2011, the Independent National Electoral Commission organized legislative, gubernatorial, and presidential elections. The opposition Action Congress of Nigeria captured additional governorships and National Assembly seats, although the majority of such positions continued to be held by the ruling PDP. President Jonathan captured 59% of the national vote, beating his main rival, Muhammadu Buhari of the Congress for Progressive Change, who won 32%. While imperfect, the elections were considered Nigeria’s most successful since its return to multiparty democracy in 1999, and reversed a downward trajectory of successively flawed election processes. President Jonathan was sworn in on May 29, 2011.
Capital: Abuja - 1.857 million (2009)
Other Major Cities: Lagos 10.203 million; Kano 3.304 million; Ibadan 2.762 million; Kaduna 1.519 million (2009)
Administrative Divisions: 36 states and 1 territory*; Abia, Adamawa, Akwa Ibom, Anambra, Bauchi, Bayelsa, Benue, Borno, Cross River, Delta, Ebonyi, Edo, Ekiti, Enugu, Federal Capital Territory*, Gombe, Imo, Jigawa, Kaduna, Kano, Katsina, Kebbi, Kogi, Kwara, Lagos, Nassarawa, Niger, Ogun, Ondo, Osun, Oyo, Plateau, Rivers, Sokoto, Taraba, Yobe, Zamfara
Source: Wikimedia Commons.
Independence Date: 1 October 1960 (from United Kingdom)
Legal System: based on English common law, Islamic law (in 12 northern states), and traditional law; accepts compulsory ICJ jurisdiction with reservations
Suffrage: 18 years of age; universal
International Environmental Agreements
Nigeria is party to international agreements on: Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Endangered Species, Hazardous Wastes, Law of the Sea, Marine Dumping, Marine Life Conservation, Ozone Layer Protection, Ship Pollution, and Wetlands.
Total Renewable Water Resources: 286.2 cu km (2003)
Freshwater Withdrawal: Total: 8.01 cu km/yr (21% domestic, 10% industrial, 69% agricultural).
Per capita Freshwater Withdrawal: 61 cu m/yr (2000)
Access to improved sources of drinking water: 58% of population
Access to improved sanitation facilities: 32% of population
Agriculture Products: cocoa, peanuts, palm oil, corn, rice, sorghum, millet, cassava (tapioca), yams, rubber; cattle, sheep, goats, pigs; timber; fish
Irrigated Land: 2,820 sq km (2003)
arable land: 33.02%
permanent crops: 3.14%
other: 63.84% (2005)
|Energy in Nigeria|
20.13 billion kWh
18.14 billion kWh
2.458 million bbl/day
2.102 million bbl/day
37.2 billion bbl
(1 January 2011 est.)
23.21 billion cu m
7.216 billion cu m
15.99 billion cu m
0 cu m
5.292 trillion cu m
(1 January 2011 est.)
|Source: CIA Factbook|
Oil-rich Nigeria has been hobbled by political instability, corruption, inadequate infrastructure, and poor macroeconomic management but in 2008 began pursuing economic reforms. Nigeria's former military rulers failed to diversify the economy away from its overdependence on the capital-intensive oil sector, which provides 95% of foreign exchange earnings and about 80% of budgetary revenues.
Following the signing of an IMF stand-by agreement in August 2000, Nigeria received a debt-restructuring deal from the Paris Club and a $1 billion credit from the IMF, both contingent on economic reforms. Nigeria pulled out of its IMF program in April 2002, after failing to meet spending and exchange rate targets, making it ineligible for additional debt forgiveness from the Paris Club. In November 2005, Abuja won Paris Club approval for a debt-relief deal that eliminated $18 billion of debt in exchange for $12 billion in payments - a total package worth $30 billion of Nigeria's total $37 billion external debt.
Since 2008 the government has begun to show the political will to implement the market-oriented reforms urged by the IMF, such as modernizing the banking system, removing subsidies, and resolving regional disputes over the distribution of earnings from the oil industry. GDP rose strongly in 2007-11 because of growth in non-oil sectors and robust global crude oil prices.
President Jonathan has established an economic team that includes experienced and reputable members and has announced plans to increase transparency, diversify economic growth, and improve fiscal management. Lack of infrastructure and slow implementation of reforms are key impediments to growth.
The government is working toward developing stronger public-private partnerships for roads, agriculture, and power. Nigeria's financial sector was hurt by the global financial and economic crises, but the Central Bank governor has taken measures to restructure and strengthen the sector to include imposing mandatory higher minimum capital requirements.
Nigeria is the United States' largest trading partner in sub-Saharan Africa, largely due to the high level of petroleum imports from Nigeria, which supply 8% of U.S. oil imports--nearly half of Nigeria's daily oil production. Nigeria is the fifth-largest exporter of oil to the United States. Two-way trade in 2010 was valued at more than $34 billion, a 51% increase over 2009, largely due to the recovery in the international price of crude oil. Led by cereals (wheat and rice), motor vehicles, petroleum products, and machinery, U.S. goods exports to Nigeria in 2010 were worth more than $4 billion. In 2010, U.S. imports from Nigeria were over $30 billion, consisting overwhelmingly of crude oil. Cocoa, bauxite and aluminum, tobacco and waxes, rubber, and grains constituted about $73 million of U.S. imports from Nigeria in 2010. The U.S. trade deficit with Nigeria in 2010 was $26 billion. Nigeria was the 13th-largest trading partner for the United States in 2010. The United States is Nigeria's largest trading partner after the United Kingdom. Although the trade balance overwhelmingly favors Nigeria, thanks to oil exports, a large portion of U.S. exports to Nigeria is believed to enter the country outside of the Nigerian Government's official statistics, due to importers seeking to avoid Nigeria's tariffs and regulations.
The United States is the largest foreign investor in Nigeria. The stock of U.S. foreign direct investment (FDI) in Nigeria in 2010 was $5.2 billion, down slightly from $5.4 billion in 2009. U.S. FDI in Nigeria is concentrated largely in the petroleum/mining and wholesale trade sectors. ExxonMobil and Chevron are the two largest U.S. corporate players in offshore oil and gas production.
In March 2009, the United States and Nigeria met under the existing Trade and Investment Framework Agreement (TIFA) to advance the ongoing work program and to discuss improvements in Nigerian trade policies and market access. Among the topics discussed were cooperation in the World Trade Organization (WTO), market access, export diversification, intellectual property protection and enforcement, commercial issues, trade capacity building and technical assistance, infrastructure, and investment issues.
Dominated by Oil
The oil boom of the 1970s led Nigeria to neglect its strong agricultural and light manufacturing bases in favor of an unhealthy dependence on crude oil. Oil and gas exports account for more than 95% of export earnings and over 80% of federal government revenue. New oil wealth and the concurrent decline of other economic sectors fueled massive migration to the cities and led to increasingly widespread poverty, especially in rural areas. A collapse of basic infrastructure and social services since the early 1980s accompanied this trend. By 2002 Nigeria's per capita income had plunged to about one-quarter of its mid-1970s high, below the level at independence. Along with the endemic malaise of Nigeria's non-oil sectors, the economy continues to witness massive growth of "informal sector" economic activities, estimated by some to be as high as 75% of the total economy.
Nigeria's proven oil reserves are estimated to be 36 billion barrels; natural gas reserves are well over 100 trillion cubic feet. Nigeria is a member of the Organization of Petroleum Exporting Countries (OPEC), and its current crude oil production averages around 1.6 million barrels per day. Poor corporate relations with indigenous communities, vandalism of oil infrastructure, severe ecological damage, and personal security problems throughout the Niger Delta oil-producing region continue to plague Nigeria's oil sector. Multinational oil companies have launched their own community development programs in an attempt to improve their relations with host communities. The Niger Delta Development Commission (NDDC) was created to help catalyze economic and social development in the region, but it is widely perceived to be ineffective and opaque. Significant exports of liquefied natural gas started in late 1999 and are slated to expand as Nigeria seeks to eliminate gas flaring.
Nigeria inspects all imports on arrival, rather than at ports of origin; as a result, about 95% of containers are physically examined. This procedure, along with Nigeria's uneven application of import and labeling regulations and poor infrastructure, complicates the movement of goods through Nigeria's notoriously congested ports and increases the cost of doing business. The government has promoted foreign investment and encouraged reforms in these and other areas, but the investment climate remains daunting to all but the most determined.
Agriculture has suffered from years of mismanagement, inconsistent and poorly conceived government policies, and the lack of basic infrastructure. Still, the sector accounts for about 40% of GDP and two-thirds of employment. Agriculture provides a significant fraction (approximately 10%) of non-oil growth. Poultry and cocoa are just two areas where production is not keeping pace with domestic or international demand. Fisheries also have great potential, but are poorly managed. Most critical for the country's future, Nigeria's land tenure system does not encourage long-term investment in technology or modern production methods and does not inspire the availability of rural credit.
Oil dependency, and the allure it generated of great wealth through government contracts, spawned other economic distortions. The country's high propensity to import means roughly 80% of government expenditures is recycled into foreign exchange. Cheap consumer imports, resulting from an overvalued Naira, coupled with excessively high domestic production costs due in part to erratic electricity and fuel supply, have pushed down industrial capacity utilization to less than 30%. Many more Nigerian factories would have closed except for relatively low labor costs (10%-15%). Domestic manufacturers, especially pharmaceuticals and textiles, have lost their ability to compete in traditional regional markets; however, there are signs that some manufacturers have begun to address their competitiveness.
Arguably Nigeria's biggest macroeconomic achievement has been the sharp reduction in its external debt, which declined from 36% of GDP in 2004 to less than 4% of GDP in 2007. In October 2005, the International Monetary Fund (IMF) approved its first-ever Policy Support Instrument for Nigeria. In December 2005, the United States and seven other Paris Club nations signed debt reduction agreements with Nigeria for $18 billion in debt reduction, with the proviso that Nigeria pay back its remaining $12 billion in debt by March 2006. The United States was one of the smaller creditors, and received about $356 million from Nigeria in return for over $600 million of debt reduction. Merrill Lynch won the right to take on $509 million of Nigeria's promissory debt (accrued since 1984) to the "London Club" of private creditors. This arrangement saved Nigeria about $34 million over a simple prepayment of the notes. Nigeria faces intense pressure to accept multibillion dollar loans for railroads, power plants, roads, and other infrastructure. Expanded government spending also has led to upward pressure on consumer prices. However, a drop in world oil prices and the global financial crisis prompted the federal government to tap its foreign exchange reserves, which consequently decreased from $60 billion to $48 billion, in order to meet pressing budget demands from cash-strapped state and local governmental bodies.
In 2009, Nigeria took significant steps to strengthen the banking sector. After completing financial audits of all 24 national banks, the Central Bank found 10 of the banks to be undercapitalized or suffering from illiquidity. The Central Bank replaced many of the failing banks' management teams and pumped nearly $6 billion into the sector. In addition, the Central Bank published the names of significant loan defaulters, which included many prominent political and business figures. These reforms came on top of a major banking overhaul in 2006 that reduced the number of banks from 89 to 24, increased a bank's minimal capital requirement to $190 million, and required banks to hold 40% of their deposits in liquid assets. Retail, corporate, and Internet banking are seen as intensively competitive, and the home loan market is considered moderately competitive. Less than 10% of lending is believed to be made to individuals. About 65% of the economically active population is serviced by the informal financial sector, e.g., microfinance institutions, moneylenders, friends, relatives, and credit unions. Since 1999, the Nigerian Stock Exchange has enjoyed strong performance, although equity as a means to foster corporate growth remains underutilized by Nigeria's private sector. Credit is largely inaccessible to rural communities, the real estate sector and small businesses receive a low level of lending, and the credit card market remains at an early stage of development.
Nigeria's publicly owned transportation infrastructure is a major constraint to economic development. Principal ports are at Lagos (Apapa and Tin Can Island), Port Harcourt, and Calabar. Docking fees for freighters are among the highest in the world. Of the 80,500 kilometers (50,000 mi.) of roads, more than 15,000 kilometers (10,000 mi.) are officially paved, but many remain in poor shape. Extensive road repairs and new construction activities are gradually being implemented as state governments, in particular, spend their portions of enhanced government revenue allocations. The government implementation of 100% destination inspection of all goods entering Nigeria has resulted in long delays in clearing goods for importers and created new sources of corruption, since the ports lack adequate facilities to carry out the inspection. Four of Nigeria's airports--Lagos, Kano, Port Harcourt and Abuja--currently receive international flights. There are several domestic private Nigerian carriers, and air service among Nigeria's cities is generally dependable. The maintenance culture of Nigeria's domestic airlines is not up to international standards.
Nigeria has made progress toward establishing a market-based economy. In recent years, it privatized the only government-owned petrochemical company and sold its interest in eight oil service companies. The Yar'Adua administration paid especially close attention to due process by overturning or reviewing a number of suspect contracts awarded by its predecessor. Nigeria's implementation of non-tariff barriers has been arbitrary and uneven and continues to violate WTO prohibitions against trade bans. However, Nigeria has made some progress in its implementation of the Economic Community of West African States (ECOWAS) Common External Tariff by removing some textile items from its list of prohibited imports in 2006. In a September 2008 breakthrough, Nigeria decreased the number of banned import categories from 44 to 26 items, reduced a number of tariffs, and reiterated its commitment to harmonizing its tariff regime with its neighbors. Enforcement of criminal penalties against intellectual property rights (IPR) violations is weak, and firms that are successfully countering IPR piracy have generally done so through civil court cases. The government has created an intellectual property commission. Rules concerning sanitary and phytosanitary standards, testing, and labeling are well defined, but bureaucratic hurdles slow trade opportunities. The government is generally supportive of biotechnology cooperation, although legislation governing biosafety is sparse at best.
A co-member of the International Advisory Group of the Extractive Industries Transparency Initiative (EITI) initiated by the G8, Nigeria's federal government is playing an important role in having volunteered to pilot the new disclosure and validation methodologies. It has completed a comprehensive audit of oil sector payments and government revenues from 1999-2004. The federal government has passed implementing legislation on public procurement and fiscal transparency, but now it must ensure that Nigeria's 36 states pass and implement similar bills. There is a perception that government contracting remains rife with corruption and kickbacks, and that many state and local officials continue to steal public monies outright.
Nigeria's economic team had enjoyed an excellent reputation in the international community. It produced an encouraging body of work, notably budgets described as "prudent and responsible" by the IMF and a detailed economic reform blueprint, the National Economic Empowerment and Development Strategy (NEEDS). Other positive developments included: (1) government efforts to deregulate fuel prices; (2) Nigeria's participation in the EITI and commitment to the G8 Anticorruption/Transparency Initiative; (3) creation of what had been an effective Economic and Financial Crimes Commission (EFCC), which until 2008 had earned 150 convictions and recovered over $5 billion in mishandled funds; and (4) development of several governmental offices to better monitor official revenues and expenditures.
Nigeria is not on track to meet its Millennium Development Goals because of a lack of policy coordination between the federal, state, and local governments, a lack of funding commitments at the state and local levels; and a lack of available staff to implement and monitor projects on health, poverty, and education.
Although Nigeria must grapple with its decaying infrastructure and a poor regulatory environment, the country possesses many positive attributes for carefully targeted investment and will expand as both a regional and international market player. Profitable niche markets outside the energy sector, such as specialized telecommunication providers, have developed under the government's reform program. There is a growing Nigerian consensus that foreign investment is essential to realizing Nigeria's vast potential. Companies interested in long-term investment and joint ventures, especially those that use locally available raw materials, will find opportunities in the large national market. However, to improve prospects for success, potential investors must educate themselves extensively on local conditions and business practices, establish a local presence, and choose their partners carefully. The Nigerian Government is keenly aware that sustaining democratic principles, enhancing security for life and property, and rebuilding and maintaining infrastructure are necessary for the country to attract foreign investment.
GDP (Purchasing Power Parity): $414.5 billion (2011 est.)
GDP (Official Exchange Rate): $247.1 billion (2011 est.)
GDP- per capita (PPP): $2,600 (2011 est.)
GDP- composition by sector:
services: 31% (2011 est.)
Population Below Poverty Line: 70% (2007 est.)
Industries: crude oil, coal, tin, columbite; palm oil, peanuts, cotton, rubber, wood; hides and skins, textiles, cement and other construction materials, food products, footwear, chemicals, fertilizer, printing, ceramics, steel, small commercial ship construction and repair
Currency: naira (NGN)
Ports and Terminals: Bonny Inshore Terminal, Calabar, Lagos