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Economy Overview
Diversification from oil and gas is becoming a number one priority for the government as oil prices continue to fall
Nigeria is the most populous country in Africa, with more than 148 million residents and an economy that is second in size only to South Africa's. The World Bank estimates its gross domestic product at USD165,690 billion in 2007.
For decades, Nigeria's economy has been dominated by the revenue generated by its vast oil reserves. As the leading African oil producer and the sixth largest producer in the Organisation of Petroleum Exporting Companies (OPEC), Nigeria pumps out 2.6m barrels a day, with proven oil reserves estimated at 35.876 million bbl (2006) and natural gas reserves of 5'229 trillion m3 (2006). The government plans to eliminate gas flaring by the end of 2008. Major importers of Nigerian oil and gas are North America, Europe and the Far East. Current estimates suggest that oil provides 20% of GDP, 95% of foreign exchange earnings, and about 80% of budgetary revenues. While there is vast potential in the oil and gas industry, Nigeria's over-reliance on oil revenues has made the economy vulnerable to fluctuations in world oil prices. The shortfalls that a drop in the price of oil could create in state budgets led to capital projects being delayed or abandoned, while civil servants and those contracted to carry out development works for the government frequently went unpaid.
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