NIGERIA

Federal Republic of Nigeria

COUNTRY OVERVIEW

LOCATION AND SIZE.

Nigeria is located in Western Africa, and borders the Gulf of Guinea, between Benin on the west and Cameroon on the east. It has a compact area of 923,768 square kilometers (356,376 square miles). The country's land mass extends from the Gulf of Guinea in the south to the Sahel (the shore of the Sahara Desert) in the north. Comparatively, Nigeria is slightly more than twice the size of California, or the size of California, Nevada, and Arizona combined. Abuja, the capital city of the Federal Republic of Nigeria, replaced the former capital city, Lagos, in December 1991, because of its more central location, among other reasons. Lagos remains Nigeria's commercial capital. Other major Nigerian cities include Ibadan, Kaduna, Kano, Maid-uquri, Jos, Port Harcourt, Enugu, Calabar, and Aba.

POPULATION.

Accurate population counts for Nigeria are difficult to obtain because such figures are tied directly to representation in the National Assembly and distribution of national wealth; therefore, they are often skewed by groups vying for political or economic advantage. In the absence of an accurate census, it is impossible to determine how many people live in Nigeria beyond rough estimates. The population of Africa's largest country was estimated at 123,337,822 in 2000. This figure represents an increase of 39.36 percent over the 1991 population census figure of 88.5 million, which was hotly debated and widely believed to have been an undercount. In the year 2000, the birth rate was estimated at 40.12 per 1,000, while the death rate was estimated at 13.72 per 1,000. With a projected annual population growth rate of 2.67 percent between 2000 and 2015, Nigeria's population is expected to increase to 156,269,020 in the year 2015. Excess mortality due to AIDS, lower life expectancy, and higher infant mortality and death rates might reduce this projected figure.
The density of population in Nigeria is among the highest in Africa. It ranges from 100 persons per square kilometer in the northeastern and west-central regions to more than 500 persons per square kilometer in the south and northwestern regions. The population is largely young. According to a 2000 estimate of the age structure, the largest segment of the population (53 percent) comprised individuals who are between 15 and 64 years old. This percentage included 33,475,794 males and 32,337,193 females. The second largest segment (44 percent) were between 0 and 14 years old and included 27,181,020 males and 26,872,317 females. The smallest segment (3 percent) were individuals 65 years and older, including 1,729,149 males and 1,722,349 females. The estimated sex ratio of the total population in 2000 was 1.02 males to 1 female while life expectancy at birth for the total population was 51.56 years: 51.58 years for males, and 51.55 years for females. The government hopes that the expansion of education, especially among women, and the availability of birth control information, including family planning, will help to control the population growth. Nigeria has received assistance from the United States Agency for International Development (USAID) to develop and implement its
programs on family planning and child survival. In 1992, Nigeria added an HIV/AIDS prevention and control program to its existing health activities.
Nigeria is a plural or multinational state, with 250 ethnic or nationality groups. The most populous and politically influential of the nationality groups include the Hausa-Fulani (29 percent) in the north, the Yoruba (21 percent) in the southwest, the Igbo (18 percent) in the southeast, and the Ijaw (10 percent) in the Niger Delta. This characteristic ethnic composition gives Nigeria a rich diversity in customs, languages, religious and cultural traditions. It also compounds Nigeria's political and economic problems. Although the people are primarily rural dwellers, Nigeria, like other post-colonial African countries, has been urbanizing rapidly. In the year 2000, nearly 25 percent of the Nigerian population were urban dwellers. At least 24 cities have populations of more than 100,000. Lagos, the largest city, had a population of 9.8 million in 1995, 12.5 million in 2000, and is projected to have a population of 25 million in 2015.

INLAND WATERWAYS.

Inland waterways totaling 8,575 kilometers, (5,329 miles) and consisting of Niger and Benue Rivers and smaller rivers and creeks, provide Nigeria's third internal transportation network. Water transportation of goods and services using boats and canoes is essential and common in riverine areas of Nigeria where road construction is difficult. In the 1980s the government invested funds in building river ports, hoping that increased passenger traffic on the nation's inland waterways would relieve the strained highway system. A major problem involves the fluctuations in the water level during the dry season, which hinder the movement of canoes.

PORTS.

Ports provide facilities for exports and imports. The port in Lagos handles the majority of cargo flowing in and out of the country by ship; other important ports include Port Harcourt, Calabar, and the delta port complex of Warri, Sapele, Koko, and Alesa Eleme. In addition to these port complexes, 2 specialized tanker terminals at Bonny, near Port Harcourt, and Burutu, near Warri, handle crude oil exports.

AIR TRAVEL.

Nigeria has 72 (1998 estimate) airports, 36 of which have paved runways. Three major international airports—Murtala Muhammad International at Lagos, Aminu Kano International at Kano, and another at Port Harcourt—offer regularly scheduled international flights. Nigeria Airport Authority manages the airports. Nigeria Airways provides domestic service between the international airports and other Nigerian cities. On 26 August 2000, Nigeria and the United States signed an "Open Skies Agreement" to expand and enhance the overall aviation partnership between the 2 countries. Among others, the agreement provides for a direct flight between Lagos and John F. Kennedy Airport in New York. It is hoped that the direct flight will boost Nigeria's tourism sector and develop Lagos as a gateway to Africa.

ELECTRICAL POWER.

Electrical power for industrial and household purposes is supplied by Nigeria's National Electric Power Authority (NEPA). The state-owned corporation, nicknamed "Never Expect Power Always" by Nigerians, is very unreliable, with daily shortages and blackouts. In 1998 its production of 14.75 billion kilowatts from fossil fuel (61.69 percent) and hydropower (38.31 percent) was highly inadequate to meet the nation's industrial and household needs. As a consequence, businesses and manufacturers operate well below capacity, while thousands of Nigerians in urban centers and rural areas buy their own power generators.

TELECOMMUNICATIONS.

Telecommunications services provide high quality links internally and to the rest of the world. The government is pursuing an ambitious telecommunications expansion program. It plans to increase Nigeria's mobile and wire lines from year 2000 numbers of 700,000 to over 4 million functional telephone lines by 2002. Nigerian Telecommunications Limited (NITEL) was the nation's sole carrier until 1993 when 8 private firms were approved to be connected to its switching system so as to provide services to various Nigerian zones.
Virtually all Nigerian localities receive broadcasts from one of 65 AM radio stations, and more than a dozen cities from FM radio stations. Shortwave broadcasts from overseas and 6 local transmitters are received throughout the country. Television services are available to most urban areas as well as rural areas with rural electrification. According to World Development Indicators (2000), 223 per 1,000 Nigerians owned radios (1997), while 66 per 1,000 owned television sets (1998). While there were 5 Internet service providers, less than 20 percent of the Nigerian urban population used the Internet in 1999.

INDUSTRY

MINING.

The oil industry dominates Nigeria's mineral development, making petroleum the most important sector of the Nigerian economy. Nigeria produces 2.3 million barrels of crude oil per day (2000). It is Africa's largest oil producer, contributing 3.0 percent to the global production, and is the world's sixth largest oil exporter. Its proven reserves are estimated at 20 billion barrels, enough to last 40 years at the current rate of production. Continuing exploration is expected to raise the total to more than 25 billion. Nigeria is a member of the Organization of Petroleum Exporting Countries (OPEC).
The state-owned Nigerian National Petroleum Corporation (NNPC) cooperates with foreign oil companies such as Shell, Mobil, Elf, Agip, Chevron, and BP in its oil industry. The parastatal was recently restructured as part of a general policy to commercialize state concerns and encourage private-sector participation in them.
Crude oil (11 percent of production) is refined in Nigeria in 4 refineries which seldom meet the country's demands. Hence, there is constant shortage of fuel. Crude oil is also the nation's largest export to such countries as the United States and Japan. Petroleum products accounted for two-thirds of Nigeria's energy consumption in the 1990s. Domestic consumption of crude oil was 250,000 barrels per day.

During the process of oil exploration, vast reserves of natural gas—estimated at 100 billion standard cubic feet—were discovered. They are the largest reserves found so far in Africa. In 1988, Nigeria produced 21.2 billion cubic meters per day with 2.9 billion cubic meters used by National Electric Power Authority and other domestic customers, 2.6 billion cubic meters used by foreign oil companies, and 15.7 billion cubic meters wasted through flaring. In 2000 Nigeria began to export Liquefied Natural Gas (LNG), an increasingly important sector which is expected at some point to surpass oil as the nation's major source of revenue. Nigerian Liquefied Natural Gas Ltd., a subsidiary of the NNPC, had signed agreements in 1992 with 4 countries—United States, France, Italy, and Spain—for supplies of LNG.
Nigeria's emphasis on the oil industry resulted in the neglect of other sectors of the mining industry. Recently, however, interest has rekindled in solid minerals such as coal, tin, iron, columbine, gold, uranium, tantalum, marble, and phosphates. Many other commercially-viable solid minerals have yet to be exploited. All solid minerals are owned by the federal government. Prospecting licenses, mining leases, quarrying licenses, and leases are granted by the Ministry of Solid Minerals Development, established early in 1995 to boost non-oil exports. The National Fertilizer Company of Nigeria operates a fertilizer complex at Onne (Rivers State). Coal production had declined as industries and trains shifted to the use of oil, gasoline, and diesel, but in 1991 2 joint ventures began operations for its mining and export. A total of 60,000 tons were exported to England in 1991. The solid minerals are attracting foreign interest for potential exploitation. In addition to the development of the solid minerals noted, Nigeria engages in processing industries for such products as palm oil, peanuts, rubber, wood, hides, and skins.

MANUFACTURING.

The manufacturing sector in the Nigerian economy is dominated by import substitution —light industries designed to produce goods that previously had been imported. The Nigerian Enterprises Promotion decrees (1972, 1977, and 1981) shifted the manufacturing sector from foreign majority ownership in the 1960s to indigenous (local) majority ownership in the mid-to-late 1970s by limiting foreign ownership shares in various industries. As a result, a few civil servants, military leaders, business people, and professionals became considerably wealthy through the purchase of the relinquished foreign-owned shares. The third development plan (1975 to 1980) envisaged a rapid phase of industrialization, emphasizing heavy industries such as iron, steel, and petrochemicals, as well as such consumer durables as automobiles. Automobile assembly plants were established in 1978 by Leyland, Peaugeot, Volkswagen, Fiat, and Daimler-Benz. Major industrial projects during the third development plan included 3 new oil refineries, 2 pulp and paper mills, an iron and steel complex, 2 liquefied natural gas plants, 3 sugar refineries, and 3 new cement factories. Their productivity was low. The iron and steel complex remained incomplete.
The fourth development plan (1981 to 1985) placed high priority on the manufacturing sector in order to promote rapid development and transformation of the economy. The extant manufacturing industries concentrated on consumer goods: food products, mineral distillation and beer brewing, textiles, cement, building materials, glass, footwear, furniture, chemical products, ceramics, and small appliances. They produced a range of goods but did not substantially increase employment or industrial growth.
Manufacturing industries are among the Obasanjo administration's priority areas of industrial investment. The administration favors industries which can rapidly be supported by locally-produced raw materials. The government also hopes to support food-production programs through local manufacture of chemicals, equipment, and light commercial vehicles. It will also focus on industries with multiplier effect such as flat-sheet mills and machine tools industry, including foundries and engineering industries for spare-parts production. The administration invites local and foreign investors in the priority areas.
The manufacturing sector suffers from a number of constraints including low demand for locally-made goods such as textiles and footwear, and the poor state of social and economic infrastructure typified by power and water shortages. However, Nigeria's manufacturing capacity utilization rose from 34 percent in 1998 to 36 percent in 1999.

SERVICES

TOURISM.

Tourism in Nigeria is highly undeveloped, considering the West African nation's available tourist resources: land, climate, vegetation, people and their festivals, abundant art treasures, national monuments, ports, traditional sports, and music. Recognizing the potential revenue the nation could generate from tourism, the government decided in 1991 to develop and promote tourism into an economically viable industry. The thrust of its policy was to "make Nigeria a prominent tourism destination in Africa, generate foreign exchange, encourage even development, promote tourism-based rural enterprises, and generate employment."
An institutional framework was put in place, namely the Federal Ministry of Commerce and Tourism, to pursue the objectives and maintain links with the state governments on funding and monitoring of a nation-wide tourism infrastructure. The government provided incentives to encourage domestic and foreign investors to participate in the venture. For example, the sector was accorded preferred-sector status, qualifying it for tax holidays and import-duty exemption on tourism-related equipment. Upon the inauguration of the Third Republic, President Obasanjo accorded the industry an additional boost by creating a separate Ministry of Tourism and Culture with Chief Ojo Madueke as its minister.
The boost notwithstanding, many impediments stand in the way of a tourist industry in Nigeria. Warnings issued by foreign governments on the dangers of travel to Nigeria scare tourists. Violent crime by individuals in police and military uniforms, as well as by ordinary criminals, is an acute and constant problem. Frequently, harassment and shakedowns of foreigners and Nigerians by uniformed personnel and others occur throughout the federation. Fake business and other advance-fee scams target foreigners worldwide and pose dangers of financial loss and potential physical harm. Other barriers to a successful tourist industry include inconsistent regulations, widespread corruption and crime, crumbling roads and bridges, erratic telephone service, frequent shortages of fuel, electricity and water, and social unrest in some parts of the country.

FINANCIAL SERVICES.

Regular banking services in Nigeria began in 1892 when the country's first bank was established. By 1952 there were 3 foreign-owned banks (the Bank of British West Africa, Barclays Bank, and the British and French Bank) and 2 indigenous banks (the National Bank of Nigeria and the African Continental Bank). A central bank, demanded by members of the Nigerian Federal House of Assembly in 1952 to help promote economic development, was established and operational on 1 July 1959. Similar to central banks in Western Europe and North America, the Central Bank of Nigeria establishes the Nigerian currency, controls and regulates the banking system, serves as banker to other banks in Nigeria, and carries out the government's economic policy in the monetary field.
Despite the tendency of Nigerians to prefer cash to checks for business and debt settlements, the banking system has expanded to include 90 banks in 2000 in 3 categories: commercial, merchant, and industrial or development banks. In addition to these categories, there are many mortgage and community banks, insurance companies, pension funds, and finance and leasing companies active in Nigeria. A drastic decline in the number of financial houses, commercial banks, and mortgage and community banks began in 1995 because of distress in the financial sector.

RETAIL.

Nigeria has one of the best-developed and most extensive retail industrial sectors in sub-Saharan Africa. This is due to its large population located in many large commercial centers, such as Lagos, Ibadan, Kano, Port Harcourt, Aba, and Onitsha, in addition to hundreds of smaller towns with more than 200,000 inhabitants. There are also hundreds of trading corporations, financial institutions, and a great variety of small business enterprises, many in the informal sector, along with thousands of large market (and roadside stands) in urban as well as rural areas.
The commercial centers house a variety of retail stores, restaurants, and secular and Christian bookshops that cater to the commercial and household needs of traders and residents. Nigerians now dominate the wholesale and retail trade which in colonial days had been virtually controlled by foreign companies from metropolitan Western Europe, Lebanon, Syria, and India. Nigerian women are playing an increasing role in the retail and distribution sector.

DEPENDENCIES

Nigeria has no territories or colonies.
—F. Ugboaja Ohaegbulam

CAPITAL:

Abuja.

MONETARY UNIT:

Naira (N). 1 naira equals 100 kobo. Coins in denominations of 1, 5, 10, 25, and 50 kobo, and notes in denominations of 5, 10, 20, and 50 naira are issued.

CHIEF EXPORTS:

Petroleum and petroleum products, cocoa, rubber, lumber, and peanuts.

CHIEF IMPORTS:

Machinery, chemicals, transport and electronic equipment, manufactured goods, food, and live animals.

GROSS DOMESTIC PRODUCT:

US$110.5 billion (purchasing power parity, 1999 est.).

BALANCE OF TRADE:

Exports: US$13.1 billion (f.o.b., 1999). Imports: US$10 billion (f.o.b., 1999).