Political Economy of Resource Curse and Dialectics of Crude Oil Dependency in Nigeria

Abstract

This paper explores the political economy of resource curse with the view of appreciating the development challenges caused by crude oil dependency in Nigeria. Relying on the systematic analysis of secondary data, it posits that Nigeria, Africa’s largest economy, a major oil producer and one of the leading member of OPEC, since the discovery of crude oil, have been awash with petrodollar but without sustainable development and industrialization. The problem attributed to the challenges is the crude oil dependent and rentier economic structure of Nigeria, where crude oil surpluses were misappropriated by the successive governments. To unravel the dialectics of crude oil dependency from a resource curse perspective, the paper argues that crude oil discovery and the oil boom of the 1970s and 1990s rather than bringing about meaningful development, under ‘right-talk’ led to a series of agitations and violence in the Niger Delta region. To mitigate the challenges of resource curse arising from crude oil dependency in Nigeria, the paper pragmatically recommends the diversification of the economy, transparency and accountability in government, the establishment of sovereign welfare fund and the restructuring of federalism.