Chapter 5 - The Nigerian Economy Before the Discovery of Crude Oil

Abstract

Nigeria has been known for her agrarian economy prior to the discovery of crude oil in commercial quantity in 1956 in a village called Oloibiri in present day Bayelsa State. Agriculture was the major source of her foreign exchange earnings through the exportation of cash crops such as rubber from Delta State in south-south region; groundnut, hide, and skin produced by the northern region; cocoa and coffee from the western region; and palm oil and kernels from the eastern region of the country. The discovery of crude oil in Nigeria is a mixed blessing. It came with economic growth and infrastructural development, though some of the projects were abandoned and the funds for those projects embezzled. The major disadvantage was the destruction of the environment, especially the aquatic environment, which affected fishing, the primary source of livelihood of the indigenous population. There is an urgent need for diversification of the Nigerian economy from its present crude oil–dependent system. Other sectors of the economy, such as agriculture and manufacturing, should be given an opportunity to thrive and support revenue from petroleum, especially now that the price of oil is nose-diving.