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Nigeria Country Profile
The future is bright
Since 1999 and the return to democracy, the Federal Republic of Nigeria has entered something of a new golden age, finally laying to rest the demons of the past. In April 2007, the first civilian handover of power in the country’s history saw President Umaru Musa Yar’Adua come to power. Under Yar’ Adua’s predecessor, Olusegun Obasanjo, the government of the African giant had begun to implement some much-needed reforms, in an attempt to move the country’s economy away from its dependence on oil and reduce corruption.
It looks like these reforms are starting to bear fruit. Over the next few years, GDP growth is expected to remain healthy, at about 6.5 per cent per year. Not only that, high export earnings should ensure a current-account surplus until at least 2012. Despite the global economic crisis, direct foreign investment in the country (mostly in oil and related fields) is expected to stay high too, at over USD10 billion per year. Much remains to be done, but a stable political system combined with Yar’Adua’s efforts to modernise the country’s infrastructure makes Nigeria an attractive investment opportunity – and not just for the oil sector.
Economy and resources
The second largest economy in Sub-Saharan Africa, responsible for 41 per cent of the region’s GDP, Nigeria is still heavily dependent on its huge oil and gas sector. Oil and gas together provide 95 per cent of foreign exchange earnings, and about 85 per cent of budgetary revenues. Most of the oil comes from onshore fields, although an increasing amount is produced offshore. However, oil’s contributions to GDP, currently standing at about 20 per cent, are decreasing as the continued insurgency in the oil-rich Niger Delta region adversely affects output. Nigeria's proven oil reserves are estimated to be 36 billion barrels; natural gas reserves are at least 100 trillion cubic feet (2.8 trillion cubic metres). The country is a member of the Organization of Petroleum Exporting Countries (OPEC). Crude oil production averaged about 2.45 million barrels per day in 2006. By late 2008, production had fallen to about 2 million barrels per day, due to rebel attacks. There is some hope that tension in the region may be eased in the near future, preferably without outside intervention.
