Abstract
In the 1970s, Nigeria appeared to have successfully leveraged two oil booms for economic progress. Growth was rapid in both industry and services, the economy grew 7.4 per cent on average annually and as high as 27 per cent in 1970. Per capita GDP increased 4 per cent annually. This growth episode was, however, short-lived and by the late 1970s had begun to slow. When oil prices crashed in the 1980s, the economy went through several years of contraction. Stagnation continued in the 1990s. Per capita GDP in Purchasing Power Parity (PPP) terms fell 40 per cent, from $1215 in 1980 to $706 in 2000 (CSAE, 2003). Income poverty level rose from 28.1 per cent to 65.6 per cent, and other indicators of welfare — notably access to education and health — also declined. The economy became more dependent on oil while productivity and competitiveness of the non-oil sector declined.
1 The authors would also like to acknowledge the important contributions of others from the Infrastructure Team, including Justin Runji and Mohua Mukherjee, and from the Finance and Private Sector Team, including Shireen ElWahab, Uma Subramanian, Thomas Muller, Astrid Manroth and Michael Fuchs.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
Bibliography
Adenikinju, A. and C. Soludo, 1997, Economic Policy and Total Factor Productivity in Nigeria’s Manufacturing Sector. Paris: OECD Development Centre.
Adenikinju, A.F. and L.N. Chete, 1999, ‘Trade Liberalization, Market Structure and Productivity in Nigeria’, The Nigerian Journal of Economic and Social Studies, 41, 385–403.
Aghion, P., P. Bacchetta and R. Ranciere, 2006, ‘Exchange Rate Volatility and Productivity Growth: The Role of Financial Development’, NBER Working Paper 12117.
Bhaumik, S., and S. Estrin, 2006, ‘The Performance of Nigerian Firms in Lagos.’ Report prepared for Lagos State Government as background to Lagos State Economic Development Strategy
Budina, N., G. Pang and S. van Wijnbergen, 2006, ‘Nigeria’s Growth Record: Dutch Disease or Debt Overhang?’ Unpublished.
Central Bank of Nigeria, 2005, Statistical Bulletin. Abuja, Nigeria: CBN.
Centre for the Study of African Economies, 2003, ‘Sources of Growth in Nigeria: An Initial Analysis’, report prepared for DFID, Nigeria. Centre for the Study of African Economies, Department of Economics, University of Oxford, Oxford.
Chete, L. and A.F. Adenikinju, 1995, ‘Productivity and Growth in Nigerian Manufacturing 1962–1985’, African Journal of Economic Policy, 2, 77–88
Djankov, S., C. Freund, and C. Pham, 2006, ‘Trading on Time.’ Washington, DC: World Bank
Eifert, B., A. Gelb, and V. Ramachandran, 2005, ‘Business Environment and Comparative Advantage in Africa: Evidence from Investment Climate Data’, presented at the World Bank Group Annual Conference on Development Economics held in Dakar, Senegal, in January 2005 (available at www.worldbank.org/afr/aftps).
Hausmann, R. and R. Rigobon, 2002, ‘An Alternative Interpretation of the Resource Curse: Theory and Policy Implications’, NBER Working Paper 9424.
Hausmann, R., and D. Rodrik, 2003, ‘Economic Development as Self-Discovery’, Journal of Development Economics, 72, 603–633.
Hausmann, R., D. Rodrik and A. Velasco, 2005, ‘Growth Diagnostics’, J. F. Kennedy School, Harvard University (available at http://ksghome.harvard.edu).
IMF, 2005, ‘Nigeria: 2005 Article IV Consultation — Staff report; Staff Supplement; and Public Information Notice on the Executive Board Discussion’, IMF country report no. 05/302.
Iyigun, M. and D. Rodrik, 2004, ‘On Efficacy of Reforms: Policy Tinkering, Institutional Change and Entrepreneurship’, NBER Working Paper 10455.
Klinger, B. and D. Lederman, 2004, ‘Discovery and Development: An Empirical Exploration of “New” Products’, World Bank Policy Research Working Paper no. 3450, World Bank, Washington, DC.
Knack, S. and P. Keefer, 1995, ‘Institutions and Economic Performance: Cross-Country Tests Using Alternative Institutional Measures’, Economics and Politics, 7, 207–227.
Marchat, J.M., J. Nasir, V. Ramachandran, et al., 2002, ‘Structure and Performance of Manufacturing Enterprises in Nigeria: Results of the RPED 2001 Nigeria Firm Survey’, RPED Paper No. 118.
Mauro, P., 1995, ‘Corruption and Growth’, Quarterly Journal of Economics, 110.
Narula, R., 2004, ‘Understanding Absorptive Capacities in an “Innovation System” Context: Consequences for Economic Growth.’ Paper prepared for DRUID seminar conference, Elsinore, Denmark, 14–16 June 2004.
Nielsen, T., 2005, ‘Nigerian Trade Policy.’ In International Monetary Fund, Nigeria: Selected Issues and Statistical Appendix. Country Report No. 05/303, Washington, DC.
’Nigeria makes it easy for small businesses to register’, USAID/Nigeria Program and Policy Development Office, Development Policy Series, No. 3, Abuja.
Nigeria National Bureau of Statistics, Federal Republic of Nigeria, 2000, Annual Abstract of Statistics, Lagos: Federal Government Publisher.
Nigeria National Bureau of Statistics, Federal Republic of Nigeria, 2003, Annual Abstract of Statistics, Lagos: Federal Government Publisher.
Nigeria National Bureau of Statistics, Federal Republic of Nigeria, 2005a, The Nigerian Statistical Fact Sheets on Economic Development, Lagos: Federal Government Publisher.
Nigeria National Bureau of Statistics, Federal Republic of Nigeria, 2005b, Annual Abstract of Statistics, Lagos: Federal Government Publisher.
Odusula, A., 2006, ‘Tax Policy Reforms in Nigeria’, research paper, UNU-WIDER.
Psacharopoulos, G., 1985, ‘Returns to Education: A Further International Update and Implications.’ Journal of Human Resources 20, 583–604.
Rankin N., M. Söderbom and F. Teal, 2004. ‘Exporting from Manufacturing Firms in Sub-Saharan Africa: Micro Evidence for Macro Outcomes.’ Working Paper. Centre for the Study of African Economies. Department of Economics. University of Oxford, Oxford.
Rodrik, D., 2004, ‘Industrial Policy for the Twenty-First Century.’ Unpublished.
Skoup and Company Ltd, 2003, ‘Cluster Development Program in Eastern Nigeria: Administrative and Infrastructure Costs Survey of the Manufacturing Sector (Abia and Anambra States).’ Report prepared for the IFC and World Bank.
Soludo, C.C., 2006, ‘Nigeria: Economic Growth Drivers and Financing Challenges’, presentation by the Governor of the Central Bank of Nigeria, 25 January 2006 (see Central Bank of Nigeria website: www.cenbank.org/publications).
Thorsten, B., A. Demirguc-Kunt and Ross E., 2000, ‘A New Database on Financial Development and Structure’, World Bank Economic Review 14, 597–605.
United Nations Conference on Trade and Development (UNCTAD), 2005, UNCTAD Handbook of Statistics, Geneva: UNCTAD.
Utomi P., A. Duncan and G. Williams, 2006, Strengthening Incentives for Economic Growth: The Political Economy of Reform.
Walkenhorst, P. and O. Cattaneo, 2006, ‘Trade, Diversification and Growth in Nigeria’. Background Document for World Bank (2007) Nigeria: Growth and Competitiveness, Washington, DC: World Bank.
Willoughby, C., 2006, Infrastructure and Economic Growth in Nigeria.
World Bank, 2005a, World Development Indicators, Washington, DC: World Bank.
World Bank, 2005b, Doing Business in 2006: Creating Jobs, Washington, DC: World Bank.
World Bank, 2006, Challenges of African Growth, Washington, DC: World Bank.
World Bank Financial Sector Development Indicators, various years, Financial Sector Operations and Policy, Washington, DC: World Bank.
World Economic Forum, 2006, Global Competitiveness Report 2005–2006. Policies Underpinning Prosperity, London: Palgrave MacMillan.
Yee P. and M. Paludetto, Consilium International Inc., 2005, ‘Nigeria: Value and Supply Chain Study.’ Report prepared for the World Bank.
Editor information
Editors and Affiliations
Copyright information
© 2008 Paul Collier, Chukwuma C. Soludo and the International Monetary Fund
About this chapter
Cite this chapter
Kwakwa, V., Adenikinju, A., Mousley, P., Owusu-Gyamfi, M. (2008). Binding Constraints to Growth in Nigeria. In: Collier, P., Soludo, C.C., Pattillo, C. (eds) Economic Policy Options for a Prosperous Nigeria. Palgrave Macmillan, London. https://doi.org/10.1057/9780230583191_2
Download citation
DOI: https://doi.org/10.1057/9780230583191_2
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-0-230-54273-0
Online ISBN: 978-0-230-58319-1
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)