ASSIGNMENT

ON

NIGERIA ECONOMIC POLICIES (PUB216)

TOPIC: SINCE INDEPENDENCE, NIGERIA HAS EMBARKED ON
SEVERAL POLICIES ON ECONOMIC DEVELOPMENT. WRITE
EXPLICITLY ON WHY THESE POLICIES HAVE NOT YIELDED
EXPECTED RESULT IN ECONOMIC DEVELOPMENT.

BY

IMUETINYANOSA MIRACLE OSASERE

SSC2208772

DEPARTMENT OF PUBLIC ADMINISTRATION

FACULTY OF SOCIAL SCIENCES
UNIVERSITY OF BENIN
BENIN CITY

SEPTEMBER, 2024.
Introduction

Since gaining independence in 1960, Nigeria has embarked on numerous economic development
policies aimed at achieving sustained growth, industrialization, and improved living standards
for its population. From ambitious five-year plans in the 1960s to structural adjustment programs
in the 1980s, and more recently, diversification efforts away from oil dependency, the country
has tried various strategies to foster economic growth. However, despite these efforts, Nigeria
continues to grapple wth high unemployment, poverty, inequality, and underdevelopment in key
sectors such as education, healthcare, and infrastructure.

The failure of these policies to meet expectations raises critical questions. Why have Nigeria's
policies not yielded the desired outcomes? What are the structural, institutional, and governance
challenges that have impeded progress? This paper explores these issues and highlights how
political instability, corruption, poor implementation, overdependence on oil, and lack of
infrastructure have contributed to the underperformance of Nigeria’s economic policies.

1. Political Instability and Policy Inconsistency

One of the key reasons for the failure of economic development policies in Nigeria is political
instability and inconsistency in policy implementation. Since independence, Nigeria has
experienced numerous military coups and changes in government, resulting in abrupt policy
shifts and disruptions in governance. The constant change in leadership, especially during the
military era, has led to short-term thinking in policy formulation, with successive governments
often abandoning or reversing the policies of their predecessors.

For instance, the development plans initiated in the 1960s and 1970s, such as the National
Development Plans, were often discontinued or poorly implemented due to changes in
government. The transition from military to civilian rule and back again created an unstable
political environment where long-term economic planning was difficult to achieve. This
instability not only disrupted continuity but also discouraged foreign investment and private
sector confidence in the Nigerian economy.
2. Corruption and Poor Governance

Corruption has been a major impediment to Nigeria’s economic development. The

embezzlement of public funds, misallocation of resources, and lack of accountability in public
offices have consistently undermined the effectiveness of economic policies. Nigeria's oil wealth,
which was supposed to be a cornerstone of economic development, has been severely
mismanaged due to corruption. According to Transparency International, Nigeria has
consistently ranked among the most corrupt countries globally, which has eroded public trust and
stifled development.

Many economic policies have been designed with good intentions but have failed during the
implementation stage because funds meant for development projects are diverted for personal
gain by government officials. For example, the Structural Adjustment Program (SAP) introduced
in 1986 to liberalize the economy and reduce dependence on oil revenues became a breeding
ground for corruption. Public sector reforms under SAP were poorly managed, and funds
intended for development were siphoned off by corrupt officials, leaving key sectors like
education, healthcare, and infrastructure in disrepair.

Corruption has also led to weak institutions, which are unable to enforce policy implementation
effectively. When institutions such as the judiciary, legislature, and anti-corruption agencies are
compromised, it becomes difficult to hold officials accountable for mismanagement, thereby
creating a vicious cycle of inefficiency and underdevelopment.

3. Overdependence on Oil Revenues

Nigeria's overreliance on oil as the primary source of revenue is another major factor hindering
the success of its economic policies. Since the discovery of oil in the 1950s, Nigeria has become
highly dependent on oil exports for foreign exchange earnings and government revenue. This
dependency has created a "resource curse," where the country’s economy is vulnerable to
fluctuations in global oil prices, and other sectors of the economy, such as agriculture and
manufacturing, have been neglected.
During periods of high oil prices, Nigeria experienced a windfall in revenue, but this was often
squandered on unsustainable projects or lost to corruption. Conversely, when oil prices dropped,
as seen during the 2014 oil price crash, the economy went into recession, and development
projects were either abandoned or severely underfunded. This dependency on a single
commodity has made it difficult for Nigeria to achieve diversified and sustainable economic
growth. Economic diversification has been a long-standing goal in Nigerian policy frameworks,
including Vision 2020 and the Economic Recovery and Growth Plan (ERGP). However, these
efforts have been insufficient due to the entrenched reliance on oil revenues and the lack of
investment in non-oil sectors.

4. Poor Infrastructure and Industrial Base

Inadequate infrastructure is another reason Nigeria’s economic development policies have not
yielded the desired results. Critical infrastructure such as power, transportation, and
telecommunications are either lacking or in poor condition. A reliable infrastructure base is
essential for industrialization, yet Nigeria has struggled with electricity generation, dilapidated
road networks, and underdeveloped rail systems. These deficiencies increase the cost of doing
business, discourage foreign and domestic investment, and reduce productivity across all sectors.

For instance, Nigeria’s manufacturing sector, which should be a driver of economic growth, has
been stunted due to unreliable electricity and poor transportation systems. Industries rely on
expensive private generators due to frequent power outages, making production costs
prohibitively high. Consequently, many companies either operate at a loss or shut down entirely,
leading to job losses and slow economic growth.

Without the necessary infrastructure to support industries, it becomes difficult for Nigeria to
achieve its development goals, such as creating jobs, boosting exports, and reducing poverty.

5. Weak Educational and Health Systems

A strong human capital base is crucial for economic development, yet Nigeria's educational and
health systems remain underdeveloped. The failure of economic policies to address these two
vital sectors has resulted in a poorly skilled workforce, which in turn has hampered
industrialization and innovation.

Nigeria’s education sector has been plagued by inadequate funding, poor infrastructure, and
brain drain, with many of the country's most talented professionals emigrating in search of better
opportunities. Similarly, the healthcare system suffers from poor funding, lack of infrastructure,
and a shortage of medical professionals. This has resulted in a high mortality rate and a low life
expectancy, further undermining the country’s human development index. Economic
development policies in Nigeria have often failed to prioritize education and health, focusing
instead on short-term financial gains. This has left the country lagging behind in global
competitiveness and innovation.

6. Lack of Inclusivity in Economic Policies

Another critical issue is that many of Nigeria’s economic policies have been top-down and not
inclusive of the wider population. Policymakers often overlook the needs and contributions of
marginalized groups such as rural communities, women, and small businesses. Development
policies that fail to address inequality and include all sectors of society are unlikely to be
successful in creating sustainable growth.

For example, agricultural policies have often favored large-scale commercial farming while
neglecting smallholder farmers, who make up the majority of Nigeria’s agricultural workforce.
As a result, poverty levels remain high in rural areas, and food security has not improved despite
various government programs aimed at boosting agricultural productivity.

Conclusion

Nigeria’s economic development policies since independence have faced numerous challenges,
including political instability, corruption, overdependence on oil, inadequate infrastructure, poor
human capital development, and a lack of inclusivity. These factors have combined to undermine
the effectiveness of the policies, preventing Nigeria from achieving sustained economic growth
and development.
For Nigeria to realize its economic potential, it is crucial that future policies address these
underlying issues through stronger governance, diversified economic strategies, investment in
infrastructure and human capital, and inclusive policymaking that benefits all sectors of society.

References

1. Transparency International. (Various years). Corruption Perceptions Index.

2. Jeje, O. (2016). Nigeria's Economic Policies: A Historical Perspective. African
Development Review, 28(3), 350-362.
3. Collier, P. (2010). Wars, Guns, and Votes: Democracy in Dangerous Places.
HarperCollins.
4. Okonjo-Iweala, N. (2018). Fighting Corruption is Dangerous: The Story Behind the
Headlines. MIT Press.