This paper analysed the economic consequences of Nigeria’s dependence on crude oil exports. The study adopted a qualitative analytical approach that made use of secondary data. The findings of the study established that since the discovery of crude oil in large quantity in Nigeria in 1956, the country has been trapped in the illusions of oil wealth and the ease of obtaining foreign exchange earnings and government revenue through crude oil exports. Consequently, the country has progressively over-depended on crude oil exports thereby resulting in the displacement and replacement of the non-oil sector exports (mostly agriculture and solid minerals) by crude oil exports. This study observed that, in addition to depriving the country of additional foreign exchange earnings and revenue from agricultural products and solid minerals exports, overdependence on crude oil exports has resulted in excessive external dependence, deprivation of demographic dividends and weak capacity of the Nigerian economy with attendant effects of high level of unemployment, poverty, low output and income, and income inequality. In addition, it has exposed the economy to unnecessary unhealthy shocks as well as development elusiveness. It is, therefore, recommended that the government should evolve and implement appropriate policies toward the diversification of the Nigerian economy. For a period of seven to ten years, a sizeable percentage of government earnings from crude oil exports should be devoted to the development of agriculture sector, solid minerals and manufacturing subsectors to bring them to a reasonable level comparable to that of other emerging economies. There should be a proper national policy on the solid minerals exploration and refining; and the same vigor government employed in the development of petroleum sector should be adopted in the case of solid minerals development.
Citation: Udo N. Ekpo (2022) An Analysis of the Economic Consequences of Nigeria’s Dependence on Crude Oil Exports, International Journal of Development and Economic Sustainability, Vol.10, No.6, pp.48-65
Keywords: non-oil exports and the Nigerian economy, non-oil sector, oil exports, oil sector
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