The Role of Fiscal Policy and its Effects on the Real Sector of the Nigerian Economy
Generally, the economy of Nigeria is a mixed economy of various industries with well improved financial, legal communications, transport and entertainment sectors. As a matter of fact, the country is said to be ranked as 31st in the globe when it comes to GDP as 2009. In this same manner, the manufacturing industry has been the second largest in the world in producing huge part of oil products and services for the West African region. However, there are various reports of mismanagement in the Nigerian economy, but still, the country still managed to bounce back towards achieving its total economic development and growth. In this connection, in 2005, Nigeria had acquired $ 170.7 billion properties, assets and revenues. And, it even increased its GDP in 2010, up to $ 374.3 billion. As a result, Nigeria became the largest economy in the West Africa Region, as well as the third largest economy in Africa. Nigeria now belongs to the top 30 economies in the continent.
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Nevertheless, even Nigeria considered the major source of oil production in the world; still it has been only producing about 3.3 percent of the world’s oil supply. It only recorded as the fifteenth in oil production worldwide; it only produces 2.2 million barrels per day (mbpd). In contrast, the country has been obviously exceeded by the top three producers in the globe and they include Saudi Arabia which produces 10.7 mbpd or 16 %, Russia produces 9.8 mbpd or 15.4 % and the United States produces 8.5 mbpd or 13.4 % correspondingly. For the record, Nigeria has an estimated oil export revenues of 1.9 millions barrels per day which is equivalent to the price of $ 65 per barrel this fiscal year. The country anticipates $ 52.2 billion income from oil industry within this year. Evidently, the petroleum sector does not really boost up the overall Nigerian economy.
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On the other hand, the agricultural area of economy does not meet the rapid population growth in the country. This is the reason that the Nigerians are importing their food products from other countries. The country’s economy is still in hurdle to leverage its enormous wealth and natural resources while poverty still exist among many communities in the country. Nonetheless, it is reported that the World Bank has discovered that because of the wide spread corruption in the country, only 1 percent of eighty percent of oil revenues goes to the Nigerian communities. In addition, Nigeria made an agreement with the Paris Club; this is a lending nations association. Under the agreement, Nigeria will pay off its outstanding balance by its energy revenues. It is observed that without the oil industry of Nigeria, the country would have total difficulties in its entire economy since human resources and infrastructure are apparently underdeveloped. The country only ranked 151 among the 177 nations in the United Nations Development Index in 2004.
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On the positive side, during 2003 to 2007 Nigeria established an economic recovery program through National Economic Empowerment Development Strategy (NEEDS). The goal of this program was to elevate the people’s standard of living by means of macro economic stability, transparency and accountability in the different government sectors. The reform program focused on the basic needs of the various communities such as need of fresh water for household use and irrigation, to improve the power supplies, to reconstruct old infrastructure, transformation of private corporations and foremost was to reduce the prevailing corruption activities in the country. The government has been positive that the NEEDS program would provide 7 million employments for the Nigerian population. In this same manner, it also targets to expand its economy by boosting non-energy exports, as well as to increase industrial capacity operation and improve agricultural productivity. Additionally, there was also a longer term economic development scheme that being created by the United Nations and it was called the National Millennium Goals for Nigeria. This program covers from 2000 to 2015 in Nigeria’s commitment to attain its wide range of goals that involve poverty reduction, high quality of education, gender equality, and improvement of health service systems and environment development related programs. And, top of all is the international expansion plans for the entire Nigerian industries. Moreover, as what being discussed, United Nations have found that Nigeria has been making progress and development in some aspects. The Nigerians are improving in other areas in their economy. The country has been doing all its effort to provide a global primary education for children as well as to protect their environment. At the same time, the country started to develop global business partnerships with other nations.
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References:
(http://www.valuefronteiraonline.com/public_upload/file/Rethinking%20Monetary%20and%20Fiscal%20Policies%20in%20Nigeria.pdf)
(http://www.valuefronteiraonline.com/public_upload/file/Rethinking%20Monetary%20and%20Fiscal%20Policies%20in%20Nigeria.pdf)
(http://www.valuefronteiraonline.com/public_upload/file/Rethinking%20Monetary%20and%20Fiscal%20Policies%20in%20Nigeria.pdf)
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