Abstract
Oil revenues are the single most important feature of the Nigerian economy. They constitute an enormous opportunity for growth. As is evident, over the entire period since they commenced, this opportunity has not been realized. At times of high oil prices the revenue has enabled both ordinary citizens and the state to achieve higher levels of consumption, but these levels have not proved sustainable: windfalls have not been converted into permanently higher levels of income. The disastrous failure of the previous oil boom of 1974–86 is often misunderstood in Nigeria. During the boom, consumption, both public and private, was high, and so living standards were temporarily high. The catastrophic failure of public policy was that the windfall was not transformed into a higher level of sustainable consumption. Indeed, on the contrary, policy during the windfall ensured that future consumption would be lower. This was because during the boom, instead of investing in productive assets, the government borrowed very heavily to finance consumption.
This is a preview of subscription content, log in via an institution.
Buying options
Tax calculation will be finalised at checkout
Purchases are for personal use only
Learn about institutional subscriptionsPreview
Unable to display preview. Download preview PDF.
References
Bevan, D.L., P. Collier and J.W. Gunning, 1999, The Political Economy of Poverty, Equity and Growth in Nigeria and Indonesia, New York: Oxford University Press.
Collier, P., 2001, ‘Implications of Ethnic Diversity’, Economic Policy, 32, 127–166.
Collier, P., 2000, ‘Ethnicity, Politics and Economic Performance’, Economics and Politics, 12, 225–245.
Collier, P. and B. Goderis, 2006, ‘Reconciling a Conundrum: Export Prices and Growth’, mimeo, CSAE.
Collier, P. and J.W. Gunning, 1999, Trade Shocks in Developing Countries, Oxford: Clarendon Press.
Collier, P. and J.W. Gunning, 2005, ‘Asset Policies during an Oil Windfall’, The World Economy, 28, 1401–1415.
Collier, P. and A. Hoeffler, 2006, ‘Testing the Neocon Agenda: Democracy and Resource Rents’, mimeo, CSAE.
Collier, P., A. Hoeffler and C. Pattillo, 2004, ‘Africa’s Exodus’, Journal of African Economies, 13 (suppl. 2), 15–54.
Gelb, A., 1989, Oil Windfalls, Blessing or Curse?, New York: Oxford University Press.
Editor information
Editors and Affiliations
Copyright information
© 2008 Paul Collier, Chukwuma C. Soludo and the International Monetary Fund
About this chapter
Cite this chapter
Collier, P. (2008). Oil, Growth and Governance 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_3
Download citation
DOI: https://doi.org/10.1057/9780230583191_3
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)