Lessons from Nigeria’s economic boom

So I have had a lot of people ask me questions along this line ‘Oh, I’m confused, I thought before oil prices fell we were growing between 5-6% per year, how come once oil prices fell, we immediately entered a recession?’.  So this article is a response to this question and suchlike, I discuss why despite having fantastic growth rates and even once being ranked as one of the fastest growing countries in the world, the economy still contracted strongly once oil prices fell. I analyse the causes of such tenuous growth and the lessons that we can learn going forward.  You can read the entire article here but find an excerpt below:

“The first and most obvious lesson is that we need to be more nuanced with our views of economic growth. As this article reminds us, how economies grow matters. Even as the 5-year growth period from 2010 to 2014 was universally hailed, not enough attention was paid to its drivers. This looks foolish in retrospect as we know that Nigeria’s growth was largely driven by high oil prices. The surge in oil prices at the start of the decade proved an economic boon for a country overly reliant on oil exports…… But as is characteristic of growth driven by extractives, there was little impact on unemployment and poverty – in fact, unemployment rose during this period“.

Okonjo-Iweala.jpg
Nigeria’s former Finance Minister – Ngozi Okonjo Iweala

 

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