Economy

Agriculture was virtually the only important part of Nigeria's economy until the rapid development of the petroleum industry in the 1960's and 1970's. A petroleum boom resulted, bringing rapid economic growth, including increased manufacturing, trade, and construction. By the late 1970's Nigeria had the most dynamic economy in black Africa. In the 1980's, however, sharply reduced petroleum prices and declining domestic production resulted in a depressed economy, one marked by much unemployment, high inflation, and a large foreign debt. The economy remained depressed during the early 1990's and military coups and political instability have hampered economic recovery.

Despite the diversification of the economy, most Nigerians are still farmers. Food production, nevertheless, is inadequate, largely because of the rapidly growing population—doubling every 20 to 25 years. Large amounts of food must be imported. Most of the farms are small, but there are also large state-owned and corporate farms. Little use is made of machinery, commercial fertilizers, or insecticides.

As in much of the rest of tropical Africa, principal domestic foods include cassava, yams, sorghum, millet, corn, rice, and beans. Among cash crops are peanuts, cacao, palm kernels, cotton, rubber, tobacco, and sesame seed. Nigeria is a leading exporter of cacao.

Goats are the most numerous livestock; next are sheep and cattle. Cattle are raised primarily in the north where tsetse flies are not present. Farm animals supply meat and dairy products, and also hides and skins for export.

Petroleum is the cornerstone of Nigeria's economy and the only major source of government revenues and foreign exchange. In total output and export, Nigeria ranks among the leading nations in the world. Production is mainly from onshore and offshore sites in the delta area of the Niger River. There are enormous reserves of natural gas, little of which is presently used. Other minerals produced include tin and coal.

Manufacturing accounts for almost 10 per cent of the gross domestic product. Sustained growth in manufacturing is hindered largely by Nigeria's heavy dependence on imported raw materials. Investment in manufacturing has come mainly from the government and from foreign multinational firms. Among the chief goods produced are processed foods, textiles, beverages, leather items, cigarettes, and soaps and detergents. Some industries, such as palm-kernel milling, peanut milling, and tin smelting, produce mainly for export. Nigeria's heavy industries include iron and steel manufacturing, petroleum refining, the making of petrochemicals, truck and automobile assembly, and cement making.

Nigeria has one of the better transportation systems in Africa. Hard-surfaced highways and railroads link most of the major cities. Many secondary roads, however, are dirt or gravel and are impassable during the rainiest part of the year. Widely used inland waterways include the Niger and Benue rivers and a network of coastal streams, especially in the deltas of the Niger and Cross rivers. Lagos and Port Har-court are the chief ports. Shipping is conducted mainly by European and West African lines, one of which is the Nigerian National Shipping Line.

Nigeria Airways connects the country's large cities and makes flights to foreign cities. Foreign carriers provide worldwide service, mainly through international airports at Lagos and Kano.

Nigeria conducts most of its foreign trade with the United States, Germany, and other west European countries. Manufactured products and foods make up the bulk of its imports; crude petroleum, most of its exports.

The basic unit of currency is the naira.