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# M. Chindo et al. Human Geographies – Journal of Studies and Research in Human Geography
Vol. 8, No. 2, November 2014 | www.humangeographies.org.ro
ISSN-print: 1843–6587 | ISSN-online: 2067–2284
The Nigerian Extractive Economy and Development
a b c
Murtala Chindo* , Ali I. Naibbi , Abubakar Abdullahi
a IBB University Lapai
b University of Portsmouth
c Federal University, Kashere
Nigeria is a resource-rich country and has become extraordinarily dependent on the oil
sector, which accounts for over 90 per cent of exports and government revenues, and
contributes up to one third of the GDP (Gross Domestic Product). Evidences have shown
that Nigeria's resource wealth has not translated into meaningful development. For
example, while other countries realised positive outcomes from mineral-based
developments, Nigeria's poor state of development is assumed to be a product of the
pathologies that are collectively known as the 'resource curse'. This paper examines various
literatures about the resource curse thesis by focusing on the experience of Nigeria, Africa's
largest oil and gas producer and exporting country. The result shows that corruption,
government complacency, the Dutch disease, lack of public accountability, neglect of
education and excessive external debt/borrowing overhang are all hampering the
development goals of the country. Whilst the measurements that support this conclusion
were made at the national level, this paper opined and called for the Nigerian resource curse
measurements to be looked at from the local scale (communities), where the resource
economy hits the ground.
Key Words: Development, Nigeria, Oil, Resources, Resource Curse, Minerals.
Article Info: Received: Revised: Accepted:May 28, 2014; November 5, 2014; November 10,
2014; November 30, 2014.Online:
Introduction
The Nigerian state is largely dependent on mineral rents; from the royalties,
levies and taxes paid by transnational oil companies, and on the prots made
from equity stakes in the numerous investments with multinational companies.
What this oil wealth has brought for the past 50 years and will possibly bring in
©2014 Human Geographies; The authors DOI:1 4 82 720.5719/hgeo.201 . .
* Corresponding author
Address: Department of Geography, IBB University Lapai, Nigeria.
Email: murtalachindo@gmail.com
72 M. Chindo et al. The Nigerian Extractive Economy 73
the future is a question of intellectual debate. As a geographer, the questions
that are of interest are: as Nigeria exploits and expands its resource wealth,
what are the processes and inter-relationships through which resources will be
developed and what impact will these have at different geographical scale –
from national to local scale? The expansion of resources should ideally guaran-
tee a certain level of prosperity, but such additional wealth can be a curse as
much as a blessing. This assessment is set against the evidence underscoring
Nigeria's lagging behind in translating oil wealth into economic prosperity.
Many scholars (such as, Auty, 1993; Ross, 2003; Sachs and Warner, 1999) have
advanced explanations on why Nigeria and other resource-rich developing
nations failed to maximise the blessings of their resource wealth. This phenome-
non, commonly known as the 'resource curse thesis' or 'paradox of plenty', is
captured in a large body of theoretical and empirical studies pioneered by Auty
(1993). Simply, resource curse refers to the paradox where countries that have
resources (such as minerals in solid, liquid or gas state) in abundance tend to
experience low economic growth and even worst development outcomes. Thus,
the broad objective of this paper is to pull together 'resources' and 'development'
literature from different perspective, and situate Nigeria within these discourses.
In order to achieve the above objectives, the paper is structured in the
following order. Section 2 explains Nigeria's overdependence on oil revenue
and the contribution of non-fuel minerals to the national economy. The relation-
ship between resource wealth and development is contained in section 3,
followed by an examination of 'mineral economies' and how their mineral
wealth affects their national economy. Section 4 elucidates the resource curse
phenomenon, with particular emphasis on Nigeria as a resource-cursed econ-
omy and where the missing link lies. The conclusion calls for an examination of
the resource curse theory at the local scale to identify more detailed gaps in
knowledge.
The Nigerian Extractive Economy
The political economy of Nigeria is based on extractive industries (Orogun,
2010). Major resources found in Nigeria include petroleum, natural gas and
solid minerals. Nigeria produces 21.2 per cent of Africa's crude oil ahead of
Libya, Egypt, and Algeria. Oil from Nigeria accounts for 2.6 per cent of global
production (BP, 2010:8), and the country is ranked the world's 13th largest
producer of crude oil (USEIA, 2013). The discovery of substantial hydrocarbon
reserves in the deep water offshore is expected to increase the reserve base from
37.2 to 40 billion barrels by 2020 (USEIA, 2013; Premium Times, 2014). As
gure 1 illustrates, Nigeria currently produces an average two million barrels
per day of OPEC's production, compared to less than 1.5 million barrels at the
peak of the Niger Delta oil conict in 2009. With the resumption of shut-in
onshore production and relative peace in the Niger Delta, crude oil production
has risen to about 2.5 million barrels per day (USEIA, 2010). Nigerian onshore
oil reserves are found in the South-southern region, known as the Niger Delta,
is an area of vast area of creeks and waterways, with a surface area of about
112,110 square kilometres (UNDP, 2006). Offshore oil reserves are in the Bight
of Benin, the Bight of Bonny and the Gulf of Guinea. Oil exploration activities
in the Niger Delta are currently focused in the deep and ultra-deep water, with
some interest in the Chad, Bida and Sokoto basins, to determine the prospect of
oil discovery in Northern Nigeria (Abubakar, 2014; NNPC, 2014; Obaje et al.,
2004; Obaje et al., 2004; Vanguard, 2014) (Figure 1).
According to the Revenue Watch Institute (2010), the Nigerian economy,
which depends on oil exports has grown extraordinarily in recent years. For
example, while from the early 1970s to 2010, the total earnings from oil stood at
just over US$600 billion, with Nigeria's petroleum exports valued at US$94.6
billion at the end of 2012 alone (OPEC, 2013). Prior to the economic downturn
of 2008, the national income had risen signicantly, with external reserves
reaching an all-time high of US$60.1 billion in 2008 (Revenue Watch Institute,
2010). Despite the huge revenue earnings in the country, the vast majority of
the Nigerian people have not benetted from this legacy of wealth as can be
seen in the later part of this section.
In addition to oil wealth, Nigeria has an estimated 5.3 trillion cubic metres
(TCM) of gas reserves, making it the world's seventh largest holder of natural
gas reserve and the largest in Africa (USEIA, 2010). Apart from natural gas,
about two-third of oil elds – associated gas (AG) is currently ared (12.5 per
cent of the world's total) because of lack of infrastructure to utilise the ared
gas. Any expansion of Nigeria's liqueed natural gas (LNG) infrastructures
(pipeline development), and the strengthening of gas-aring policies would
reduce gas aring in the immediate future, and accelerate gas utilisation, both
for export market and domestic use.
Figure 1. Average daily crude oil production from OPEC countries
(Data source from OPEC, 2013).
72 M. Chindo et al. The Nigerian Extractive Economy 73
the future is a question of intellectual debate. As a geographer, the questions
that are of interest are: as Nigeria exploits and expands its resource wealth,
what are the processes and inter-relationships through which resources will be
developed and what impact will these have at different geographical scale –
from national to local scale? The expansion of resources should ideally guaran-
tee a certain level of prosperity, but such additional wealth can be a curse as
much as a blessing. This assessment is set against the evidence underscoring
Nigeria's lagging behind in translating oil wealth into economic prosperity.
Many scholars (such as, Auty, 1993; Ross, 2003; Sachs and Warner, 1999) have
advanced explanations on why Nigeria and other resource-rich developing
nations failed to maximise the blessings of their resource wealth. This phenome-
non, commonly known as the 'resource curse thesis' or 'paradox of plenty', is
captured in a large body of theoretical and empirical studies pioneered by Auty
(1993). Simply, resource curse refers to the paradox where countries that have
resources (such as minerals in solid, liquid or gas state) in abundance tend to
experience low economic growth and even worst development outcomes. Thus,
the broad objective of this paper is to pull together 'resources' and 'development'
literature from different perspective, and situate Nigeria within these discourses.
In order to achieve the above objectives, the paper is structured in the
following order. Section 2 explains Nigeria's overdependence on oil revenue
and the contribution of non-fuel minerals to the national economy. The relation-
ship between resource wealth and development is contained in section 3,
followed by an examination of 'mineral economies' and how their mineral
wealth affects their national economy. Section 4 elucidates the resource curse
phenomenon, with particular emphasis on Nigeria as a resource-cursed econ-
omy and where the missing link lies. The conclusion calls for an examination of
the resource curse theory at the local scale to identify more detailed gaps in
knowledge.
The Nigerian Extractive Economy
The political economy of Nigeria is based on extractive industries (Orogun,
2010). Major resources found in Nigeria include petroleum, natural gas and
solid minerals. Nigeria produces 21.2 per cent of Africa's crude oil ahead of
Libya, Egypt, and Algeria. Oil from Nigeria accounts for 2.6 per cent of global
production (BP, 2010:8), and the country is ranked the world's 13th largest
producer of crude oil (USEIA, 2013). The discovery of substantial hydrocarbon
reserves in the deep water offshore is expected to increase the reserve base from
37.2 to 40 billion barrels by 2020 (USEIA, 2013; Premium Times, 2014). As
gure 1 illustrates, Nigeria currently produces an average two million barrels
per day of OPEC's production, compared to less than 1.5 million barrels at the
peak of the Niger Delta oil conict in 2009. With the resumption of shut-in
onshore production and relative peace in the Niger Delta, crude oil production
has risen to about 2.5 million barrels per day (USEIA, 2010). Nigerian onshore
oil reserves are found in the South-southern region, known as the Niger Delta,
is an area of vast area of creeks and waterways, with a surface area of about
112,110 square kilometres (UNDP, 2006). Offshore oil reserves are in the Bight
of Benin, the Bight of Bonny and the Gulf of Guinea. Oil exploration activities
in the Niger Delta are currently focused in the deep and ultra-deep water, with
some interest in the Chad, Bida and Sokoto basins, to determine the prospect of
oil discovery in Northern Nigeria (Abubakar, 2014; NNPC, 2014; Obaje et al.,
2004; Obaje et al., 2004; Vanguard, 2014) (Figure 1).
According to the Revenue Watch Institute (2010), the Nigerian economy,
which depends on oil exports has grown extraordinarily in recent years. For
example, while from the early 1970s to 2010, the total earnings from oil stood at
just over US$600 billion, with Nigeria's petroleum exports valued at US$94.6
billion at the end of 2012 alone (OPEC, 2013). Prior to the economic downturn
of 2008, the national income had risen signicantly, with external reserves
reaching an all-time high of US$60.1 billion in 2008 (Revenue Watch Institute,
2010). Despite the huge revenue earnings in the country, the vast majority of
the Nigerian people have not benetted from this legacy of wealth as can be
seen in the later part of this section.
In addition to oil wealth, Nigeria has an estimated 5.3 trillion cubic metres
(TCM) of gas reserves, making it the world's seventh largest holder of natural
gas reserve and the largest in Africa (USEIA, 2010). Apart from natural gas,
about two-third of oil elds – associated gas (AG) is currently ared (12.5 per
cent of the world's total) because of lack of infrastructure to utilise the ared
gas. Any expansion of Nigeria's liqueed natural gas (LNG) infrastructures
(pipeline development), and the strengthening of gas-aring policies would
reduce gas aring in the immediate future, and accelerate gas utilisation, both
for export market and domestic use.
Figure 1. Average daily crude oil production from OPEC countries
(Data source from OPEC, 2013).
74 M. Chindo et al. The Nigerian Extractive Economy 75
Apart from oil and gas, Nigeria is endowed with solid mineral wealth such as
gold, iron ore, columbite, coal, limestone, oil sands, tin, barite among others
(see, for example, Obaje, 2009). Solid minerals, unlike oil, are found across the
country; while some of them are of commercial value, others are too small to
exploit protably under current market and technological conditions. Yet, other
unconventional oil resources, such as oil sands, are awaiting investment
(Ayoade, 2007; Meyer et al., 2007; MSMD, 2008). Davenport (2010) estimated
that the expansion of mining has the potential to contribute about 15 per cent
to Nigeria's GDP by the year 2015. This is an overly optimistic estimate consid-
ering the current poor performance of the sector within the economy. As gure
2 illustrates, this sector, unlike oil, is undeveloped, non-productive, and cur-
rently contributes less than 0.5 per cent to Nigeria's GDP (NBS, 2013). For
example, Nda-Isiah (2013) claimed that the amount of revenue the country
loses from gold alone is about N4 trillion (US$25 billion) per annum, which is
roughly equivalent to the annual national budget (Figure 2).
Usually, the combination of Nigeria's oil and gas revenues and solid minerals
potential would be considered a 'blessing' to the nation. Unfortunately, the
blessings have instead become a curse, because Nigeria's development indices
radically differs from the promises. A look at some measures of economic and
social development supports the above statement. The poverty rate (measured
against US$1 per day) continues to rise, accounting for over 60 per cent of
Nigeria's estimated 170 million people, 43 per cent lack clean water and good
sanitation and infant mortality is among the highest in the world (NBS, 2008;
UNICEF, 2014). Furthermore, the 2013 UNDP Human Development Index
ranked Nigeria below countries like Uganda, Cameroon, Ghana, Gabon, Togo
and Congo. Despite the vast mineral wealth and human resources, 68 per cent
of Nigerians live on less than US$1.25 a day (UNDP, 2010:162). This suggests
that the number of poor people in Nigeria is more than the combined 90
million population of the other 10 West African countries, excluding Ghana and
Cote d'Ivoire.
Nigeria's energy sector continues to dwindle over the years – even with
abundant energy resources – and the crisis has deed solution. Electricity supply
is erratic and of poor quality (Odularu and Okonkwo, 2009). By the end of
2013, the total power generation capacity was less than 4,000 megawatts (MW),
meaning per capita energy consumption was just 135 kilowatt hours (kWh) per
person - less than that of Ghana, Senegal, Angola and Kenya (Research and
Markets, 2011; Sambo, 2009). The huge decit meant that the majority of the
population live far below the 4,000 kWh levels required for achieving a decent
standard of human existence (UNDP, 2010). Around 50.6 per cent of the 168.8
million people are without access to electricity, while the remaining 85 million
receive low quality or an irregular supply (Moss, 2014). Thus, it will be difcult
and expensive for Nigeria to sustain its economic growth, drive policies towards
diversication, energise human development process, attain the Millennium
Development Goals (MDGs) and encourage investors, without making reliable
and affordable energy available.
The description above of the coexistence of vast wealth in natural resources,
weak economic performance and weak human development as exemplied by
high personal poverty is regarded as the 'resource curse' or the 'paradox of
plenty', that aficts Nigeria (Auty, 1993).It is therefore not surprising that the
'Failed States Index' ranked Nigeria as the 16th most failed nation in the world
in 2013, because of the country's weak internal security and the government's
failure to perform basic development functions (The Fund for Peace, 2014).
These rankings show a worrying combination of high levels of poverty and high
levels of risks. The risk might even be higher in solid minerals because they
require large amounts of capital with long payback periods, and projects can
operate for decades. Resource investments are made taking into account
potential rewards against possible risks. Apart from operational risks (explora-
tion, mining, production and reclamation), business-related risks, carbon
emissions and social and legal factors such as government effectiveness and
communities' affects investment decisions (see, for example, Bhappu and
Guzman, 1995; Costa Lima, 2006; Esteves, 2008; Morgan, 2002; Topal, 2008).
In addition to the above uncertainties, the world now faces energy dilemma
in meeting the future challenges of energy security and climate change
(Bradshaw, 2013). With countries working at achieving their carbon emission
targets and discussing alternative and renewable sources of energy (Bradshaw,
2013), the predictions for the future of oil cannot be all positive, and this is a
catastrophe for Nigeria whose revenue depended on it. Unlike Nigeria, Saudi
Arabia and the United Arab Emirate are tackling the reality of oil volatility
through economic diversication, such as manufacturing and tourism
(Aldagheiri, 2008). Other OPEC countries, notably Qatar is planning in and for
a situation of plentiful oil and gas reserves (see Hvidt, 2013). If lessons are to be
learnt from the 2008 oil price shock, Nigeria should pay greater attention to
diversifying its economy and depend less on oil revenue, while strengthening
the tax system in a similar manner achieved by non-oil producing countries.
Figure 2. Contribution of crude oil and solid minerals to the GDP from 1981-2010
Source: Data from NBS (2009; 2010).
74 M. Chindo et al. The Nigerian Extractive Economy 75
Apart from oil and gas, Nigeria is endowed with solid mineral wealth such as
gold, iron ore, columbite, coal, limestone, oil sands, tin, barite among others
(see, for example, Obaje, 2009). Solid minerals, unlike oil, are found across the
country; while some of them are of commercial value, others are too small to
exploit protably under current market and technological conditions. Yet, other
unconventional oil resources, such as oil sands, are awaiting investment
(Ayoade, 2007; Meyer et al., 2007; MSMD, 2008). Davenport (2010) estimated
that the expansion of mining has the potential to contribute about 15 per cent
to Nigeria's GDP by the year 2015. This is an overly optimistic estimate consid-
ering the current poor performance of the sector within the economy. As gure
2 illustrates, this sector, unlike oil, is undeveloped, non-productive, and cur-
rently contributes less than 0.5 per cent to Nigeria's GDP (NBS, 2013). For
example, Nda-Isiah (2013) claimed that the amount of revenue the country
loses from gold alone is about N4 trillion (US$25 billion) per annum, which is
roughly equivalent to the annual national budget (Figure 2).
Usually, the combination of Nigeria's oil and gas revenues and solid minerals
potential would be considered a 'blessing' to the nation. Unfortunately, the
blessings have instead become a curse, because Nigeria's development indices
radically differs from the promises. A look at some measures of economic and
social development supports the above statement. The poverty rate (measured
against US$1 per day) continues to rise, accounting for over 60 per cent of
Nigeria's estimated 170 million people, 43 per cent lack clean water and good
sanitation and infant mortality is among the highest in the world (NBS, 2008;
UNICEF, 2014). Furthermore, the 2013 UNDP Human Development Index
ranked Nigeria below countries like Uganda, Cameroon, Ghana, Gabon, Togo
and Congo. Despite the vast mineral wealth and human resources, 68 per cent
of Nigerians live on less than US$1.25 a day (UNDP, 2010:162). This suggests
that the number of poor people in Nigeria is more than the combined 90
million population of the other 10 West African countries, excluding Ghana and
Cote d'Ivoire.
Nigeria's energy sector continues to dwindle over the years – even with
abundant energy resources – and the crisis has deed solution. Electricity supply
is erratic and of poor quality (Odularu and Okonkwo, 2009). By the end of
2013, the total power generation capacity was less than 4,000 megawatts (MW),
meaning per capita energy consumption was just 135 kilowatt hours (kWh) per
person - less than that of Ghana, Senegal, Angola and Kenya (Research and
Markets, 2011; Sambo, 2009). The huge decit meant that the majority of the
population live far below the 4,000 kWh levels required for achieving a decent
standard of human existence (UNDP, 2010). Around 50.6 per cent of the 168.8
million people are without access to electricity, while the remaining 85 million
receive low quality or an irregular supply (Moss, 2014). Thus, it will be difcult
and expensive for Nigeria to sustain its economic growth, drive policies towards
diversication, energise human development process, attain the Millennium
Development Goals (MDGs) and encourage investors, without making reliable
and affordable energy available.
The description above of the coexistence of vast wealth in natural resources,
weak economic performance and weak human development as exemplied by
high personal poverty is regarded as the 'resource curse' or the 'paradox of
plenty', that aficts Nigeria (Auty, 1993).It is therefore not surprising that the
'Failed States Index' ranked Nigeria as the 16th most failed nation in the world
in 2013, because of the country's weak internal security and the government's
failure to perform basic development functions (The Fund for Peace, 2014).
These rankings show a worrying combination of high levels of poverty and high
levels of risks. The risk might even be higher in solid minerals because they
require large amounts of capital with long payback periods, and projects can
operate for decades. Resource investments are made taking into account
potential rewards against possible risks. Apart from operational risks (explora-
tion, mining, production and reclamation), business-related risks, carbon
emissions and social and legal factors such as government effectiveness and
communities' affects investment decisions (see, for example, Bhappu and
Guzman, 1995; Costa Lima, 2006; Esteves, 2008; Morgan, 2002; Topal, 2008).
In addition to the above uncertainties, the world now faces energy dilemma
in meeting the future challenges of energy security and climate change
(Bradshaw, 2013). With countries working at achieving their carbon emission
targets and discussing alternative and renewable sources of energy (Bradshaw,
2013), the predictions for the future of oil cannot be all positive, and this is a
catastrophe for Nigeria whose revenue depended on it. Unlike Nigeria, Saudi
Arabia and the United Arab Emirate are tackling the reality of oil volatility
through economic diversication, such as manufacturing and tourism
(Aldagheiri, 2008). Other OPEC countries, notably Qatar is planning in and for
a situation of plentiful oil and gas reserves (see Hvidt, 2013). If lessons are to be
learnt from the 2008 oil price shock, Nigeria should pay greater attention to
diversifying its economy and depend less on oil revenue, while strengthening
the tax system in a similar manner achieved by non-oil producing countries.
Figure 2. Contribution of crude oil and solid minerals to the GDP from 1981-2010
Source: Data from NBS (2009; 2010).
76 M. Chindo et al. The Nigerian Extractive Economy 77
Mineral Resources and Development
Mineral resources are by nature the most common form of non-renewable
resources that are extracted as primary products, for example, metallic miner-
als (lead, zinc, iron ore, diamond, gold), hydrocarbons in solid, liquid and gas
states of matter (bitumen, oil, gas) and aggregates/industrial minerals (gypsum,
limestone, granite, phosphate). Adequate, affordable and secure access to
mineral resources is regarded as the lifeblood of a modern society (Bradshaw,
2005). This means minerals should be a blessing provided by nature to be used
to better the lot of a nation and its citizens.
Naturally, the key drivers for resource demand are population and economic
growth, with associated urbanisation, rising standards of living, construction
activity and infrastructure, metals and energy-intensive manufacturing and
industrialisation. It is estimated that emerging countries will need more mineral
resources to fuel their development and infrastructure growth. For example, the
BRIC nations (Brazil, Russia, India and China) alone are expected to consume
about 121 per cent of oil, 140 per cent of aluminium and 105 per cent of
copper by 2015 (Friedland, 2008). Similarly, advances in technology are related
to the increase in demand for platinum. Diesel/hydrogen cars are being consid-
ered for the future to reduce carbon emission and reduce the rate of fuel
consumption. To realise this goal, the demand for platinum as a raw material is
on the rise, resulting in increasing prices.
Another important key driver for resource demand is the global agenda for
development such as the MDGs (e.g. Warner and Alexander, 2005). To meet
these goals in an era of declining conventional oil reserves, there is the require-
ment for huge supplies of mineral resources, the provision of clean water,
sanitation and healthcare, transport and telecommunications services, and
power for heating, cooking and industrialisation (Organisation for Economic
Co-operation and Development (OECD) (OECD/IEA, 2010). Consequently, new
frontiers like ultra-deep water and the Arctic, or unconventional and dirtier
forms of fossil fuels such as the oil sands, oil shale, tight gas and shale gas are
being developed. The result is growing demand that is fuelling the dramatic
increase in greenhouse gas emissions that causes climate change.
Unlike the oil boom periods in the past, growth in mineral demand has
shifted geographically in favour of the developing countries. Mineral supply to
non-OECDs has increased tremendously as economic growth in these countries
is more heavily reliant on mineral resources than is the case in OECD countries.
China, India and the Middle East are identied as the main locus of demand,
because their economies are currently in a “resource-intensive growth phase”
(United Nations Centre for Trade and Development (UNCTAD), 2007:88).
During the cyclical era of mineral boom, exporting countries benet immensely
from high mineral prices, and market capitalisation of mining companies has
followed the same trend – i.e. looking for opportunities to expand production
and intensify exploration. Those countries whose economies depend on their
mineral wealth have the prospects of generating higher revenue to nance their
societies. For example, Australia benetted from mineral export, earning
AUD59.2 billion in 2006 alone (ICMM, 2007).
According to Mahtani (2008:1), there is a “new scramble for Africa's
resources” ranging from conventional to unconventional oils by small start-up
companies to multinationals. The new frontiers for oil are Ghana, Uganda,
Niger and the discovery of oil sands in Madagascar, Congo and Nigeria corrobo-
rate Mahtani's (2008) assertion. In 2007, China offered a loan of US$5 billion to
DRC for the development of its infrastructure in return for cobalt and copper.
In reaction to this rush for nite resources and the accompanying unfolding
energy crisis, in 2007 the G8 summit put global energy security and climate
change at the top of international political agenda. The next section considers
theoretical background for situating Nigeria as a mineral economy.
Mineral-Dependent Economies
The denition of a mineral economy is not merely dependent on the amount of
resources available to a country, but also on the contribution of such resources in
macro-economic terms. Ahrend (2005:4) dene resource-based economies as
countries whose mineral revenues account for more than 10 per cent of GDP
and 40 per cent of exports. This denition fails to take into account the
diversity and heterogeneity of countries. Some countries largely depend on
mineral exports, which contributes less signicantly to their GDP. The World
Bank (2004) classify resource-rich countries as those in which extractive indus-
tries account for, or are expected to account for, more than 50 per cent of
government revenues. This paper relies on the International Monetary Fund's
(IMF) denition, which denes mineral economies on the basis of: 1) the
average share of hydrocarbon, and/or mineral revenues in total scal revenue of
at least 25 per cent during the previous three years; and 2) on an average share
of hydrocarbon and/or mineral export proceeds in total export proceeds of at
least 25 per cent during the previous three years (Extractive Industries
Transparency Initiatives (EITI), 2005:4). This denition suggests that almost all
African countries are either mineral economies, emerging mineral economies or
economies with signicant mineral potential.
Nigeria, together with Botswana, Angola, South Africa, Liberia and Saudi
Arabia fall into the category of mineral economies, because each of these
countries economy squarely relies on resource revenue. For example, in Nigeria
and Saudi Arabia, the petroleum sector accounts for 45 per cent of GDP and 90
per cent of export (United States Energy Information Administration (USEIA),
2009). The hydrocarbon sector in Libya accounts for 70 per cent of the GDP, 93
per cent of government revenues and 95 per cent of export earnings (Edwik,
2007). Emerging mineral economies including Tanzania, Niger, Ghana, Mali
and Democratic Republic of the Congo have high-value oil, gold, copper and
diamond reserves, but are yet to realise the full potential of their resources.
The development literature suggests that resource-rich and mineral econo-
mies should, under normal situations, have some obvious advantages over
resource-poor countries. First, revenues earned through mineral exports can
generate wealth, thus allowing the purchase of essential goods and provision of
services to the people. Second, processing of these minerals into nished or
semi-nished goods can promote industrialisation with import substitution and
competitive exports. Third, revenues from mineral resources can be used to
nance human and physical development. On the contrary, and unfortunately,
76 M. Chindo et al. The Nigerian Extractive Economy 77
Mineral Resources and Development
Mineral resources are by nature the most common form of non-renewable
resources that are extracted as primary products, for example, metallic miner-
als (lead, zinc, iron ore, diamond, gold), hydrocarbons in solid, liquid and gas
states of matter (bitumen, oil, gas) and aggregates/industrial minerals (gypsum,
limestone, granite, phosphate). Adequate, affordable and secure access to
mineral resources is regarded as the lifeblood of a modern society (Bradshaw,
2005). This means minerals should be a blessing provided by nature to be used
to better the lot of a nation and its citizens.
Naturally, the key drivers for resource demand are population and economic
growth, with associated urbanisation, rising standards of living, construction
activity and infrastructure, metals and energy-intensive manufacturing and
industrialisation. It is estimated that emerging countries will need more mineral
resources to fuel their development and infrastructure growth. For example, the
BRIC nations (Brazil, Russia, India and China) alone are expected to consume
about 121 per cent of oil, 140 per cent of aluminium and 105 per cent of
copper by 2015 (Friedland, 2008). Similarly, advances in technology are related
to the increase in demand for platinum. Diesel/hydrogen cars are being consid-
ered for the future to reduce carbon emission and reduce the rate of fuel
consumption. To realise this goal, the demand for platinum as a raw material is
on the rise, resulting in increasing prices.
Another important key driver for resource demand is the global agenda for
development such as the MDGs (e.g. Warner and Alexander, 2005). To meet
these goals in an era of declining conventional oil reserves, there is the require-
ment for huge supplies of mineral resources, the provision of clean water,
sanitation and healthcare, transport and telecommunications services, and
power for heating, cooking and industrialisation (Organisation for Economic
Co-operation and Development (OECD) (OECD/IEA, 2010). Consequently, new
frontiers like ultra-deep water and the Arctic, or unconventional and dirtier
forms of fossil fuels such as the oil sands, oil shale, tight gas and shale gas are
being developed. The result is growing demand that is fuelling the dramatic
increase in greenhouse gas emissions that causes climate change.
Unlike the oil boom periods in the past, growth in mineral demand has
shifted geographically in favour of the developing countries. Mineral supply to
non-OECDs has increased tremendously as economic growth in these countries
is more heavily reliant on mineral resources than is the case in OECD countries.
China, India and the Middle East are identied as the main locus of demand,
because their economies are currently in a “resource-intensive growth phase”
(United Nations Centre for Trade and Development (UNCTAD), 2007:88).
During the cyclical era of mineral boom, exporting countries benet immensely
from high mineral prices, and market capitalisation of mining companies has
followed the same trend – i.e. looking for opportunities to expand production
and intensify exploration. Those countries whose economies depend on their
mineral wealth have the prospects of generating higher revenue to nance their
societies. For example, Australia benetted from mineral export, earning
AUD59.2 billion in 2006 alone (ICMM, 2007).
According to Mahtani (2008:1), there is a “new scramble for Africa's
resources” ranging from conventional to unconventional oils by small start-up
companies to multinationals. The new frontiers for oil are Ghana, Uganda,
Niger and the discovery of oil sands in Madagascar, Congo and Nigeria corrobo-
rate Mahtani's (2008) assertion. In 2007, China offered a loan of US$5 billion to
DRC for the development of its infrastructure in return for cobalt and copper.
In reaction to this rush for nite resources and the accompanying unfolding
energy crisis, in 2007 the G8 summit put global energy security and climate
change at the top of international political agenda. The next section considers
theoretical background for situating Nigeria as a mineral economy.
Mineral-Dependent Economies
The denition of a mineral economy is not merely dependent on the amount of
resources available to a country, but also on the contribution of such resources in
macro-economic terms. Ahrend (2005:4) dene resource-based economies as
countries whose mineral revenues account for more than 10 per cent of GDP
and 40 per cent of exports. This denition fails to take into account the
diversity and heterogeneity of countries. Some countries largely depend on
mineral exports, which contributes less signicantly to their GDP. The World
Bank (2004) classify resource-rich countries as those in which extractive indus-
tries account for, or are expected to account for, more than 50 per cent of
government revenues. This paper relies on the International Monetary Fund's
(IMF) denition, which denes mineral economies on the basis of: 1) the
average share of hydrocarbon, and/or mineral revenues in total scal revenue of
at least 25 per cent during the previous three years; and 2) on an average share
of hydrocarbon and/or mineral export proceeds in total export proceeds of at
least 25 per cent during the previous three years (Extractive Industries
Transparency Initiatives (EITI), 2005:4). This denition suggests that almost all
African countries are either mineral economies, emerging mineral economies or
economies with signicant mineral potential.
Nigeria, together with Botswana, Angola, South Africa, Liberia and Saudi
Arabia fall into the category of mineral economies, because each of these
countries economy squarely relies on resource revenue. For example, in Nigeria
and Saudi Arabia, the petroleum sector accounts for 45 per cent of GDP and 90
per cent of export (United States Energy Information Administration (USEIA),
2009). The hydrocarbon sector in Libya accounts for 70 per cent of the GDP, 93
per cent of government revenues and 95 per cent of export earnings (Edwik,
2007). Emerging mineral economies including Tanzania, Niger, Ghana, Mali
and Democratic Republic of the Congo have high-value oil, gold, copper and
diamond reserves, but are yet to realise the full potential of their resources.
The development literature suggests that resource-rich and mineral econo-
mies should, under normal situations, have some obvious advantages over
resource-poor countries. First, revenues earned through mineral exports can
generate wealth, thus allowing the purchase of essential goods and provision of
services to the people. Second, processing of these minerals into nished or
semi-nished goods can promote industrialisation with import substitution and
competitive exports. Third, revenues from mineral resources can be used to
nance human and physical development. On the contrary, and unfortunately,
78 M. Chindo et al. The Nigerian Extractive Economy 79
the experience of these countries over the past several decades shows dramatical
drop in path to development (Auty, 1994; Ahrend, 2005). This is particularly the
case in the developing countries where countries with rich minerals suffers from
a low level of human and capital development. The contribution of resources to
development in these countries has become subject to intense enquiry, which is a
reection of the complex issues surrounding mineral extraction, the challenge
of maximising benets, and the sustainable development of particularly local
communities. The next part of this paper highlights the transition from
resource wealth to resource curse.
The Resource Curse Phenomenon
According to Auty (2001a), resource endowment can bring a huge wealth to
countries and can be a valuable development asset. Considering the rising
mineral prices and increasing revenue to resource-rich countries, this view was
challenged, as it was observed that resource-rich countries grew more slowly
than resource-poor countries. In this case, this paper simplies the various
opposing arguments that resources are a curse rather than a blessing into
'conventional' and 'alternative' views.
Prior to 1980s, the conventional view, using modernisation theory, argues
that large revenue from mineral wealth through rents should generate substan-
tial wealth for the economy, which would translate to economic prosperity,
poverty reduction and service delivery, just like the path taken by the developed
nations. Furthermore, it explains that mineral reserves can be mined protably
as part of a country's stock of natural capital, along with agricultural land,
forests, and other natural resources. Proponents of this view, known as the big
push theorists (see, for example, Rosenstein-Rodan, 1943), suggested that
mineral endowment would industrialise the developing countries based on
revenue windfalls from extractive activities. Likewise, Rostow's (1960) third of
the 've-stage development model' argued that the presence of abundant
natural resources would allow developing countries to 'take off' (a transitional
stage) similar to Britain's course to development. No doubt, resources have
historically played a vital role in the economic success of resource-rich countries,
such as in Canada, Australia, Norway and the United States. However, the global
economy has changed signicantly since the nineteenth century, and assump-
tions based on historical analogy that all resource-rich countries will take the
same path to development are misleading (Power, 2002).
Empirical studies undertaken by the International Council on Mining and
Metals (ICMM), United Nations Conference on Trade and Development
(UNCTAD) and the Overseas Development Institute (ODI) (2006), among
others, established that mineral extraction provides economic growth and
poverty eradication opportunities to countries that are at their early stages of
development. This was based on case studies where the mineral industry is
bringing about economic prosperity. Surely the above are examples of countries
that have managed to avoid the curse. For example, Ross (2001:62) admitted
that: “some states with large extractive industries - like Botswana, Chile and
Malaysia - have overcome many of the obstacles …and implemented sound pro-
poor strategies”. Other similar instances include Indonesia (Temple, 2001) and
Norway (Wright and Czelusta, 2002). Likewise, emerging oil economies such as
Angola,Uganda, Peru, Tanzania and Ghana are likely to benet from their
resources if they can learn from Nigeria, Libya and Iraq the kind of challenges
that confront African countries that seek to exclusively depend oil or other
mineral wealth as a catalyst for fostering economic growth and development.
The alternative view is more negative about the ability of mineral revenues to
promote economic prosperity. While Richard Auty was the rst to use the term
'resource curse' in economic literature to show why resource wealth hinders
economic growth and development, Sachs and Warner (1995) are among the
rst authors to use cross-country evidence for the resource curse phenomenon.
An earlier study by Auty (1990) found that per capita income of non-mineral
producing nations is two to three times higher than that of the mineral econo-
mies. The publication of their evidence heralded the emergence of an extensive
body of literature that sought to explain their ndings (see for example, Auty,
2001a,b) in different perspectives (see for example, Brunnschewiler, 2008;
Stevens, 2003). Stevens (2003) has questioned the robustness of the ndings of
Auty (2001a) on the basis of the denition of resource-intensity, and the time
period chosen for their analysis. The resource curse thesis, however, offers a
diverse set of explanations covering, amongst others, terms of trade effects,
Dutch disease (the decay and diminishing contribution of other sectors other
than oil in the economy), internal conict, human rights, debt overhang,
institutional quality, corruption and rent-seeking behaviour.
Conversely, modern analysts such as Watts (2008) and Orogun (2010)
considered the advent of oil as leading to weakening nascent democratic
institutions, repressing political policies, poor and opaque public nance and
corruption by elites in 'Petrostates' (Watt, 2008). Nigeria, Venezuela, Sierra
Leone, Angola, and Niger are common examples of mineral economies associ-
ated with poor economic growth, conict and under-development. Thomas
Friedman; New York Times columnist, having studied crude oil prices in
relation to freedom and political powers in Iran, Iraq, Venezuela, Nigeria and
Russia for three decades, identied a First Law of Petropolitics. In this law,
Friedman argued that: “the higher the average global crude price of oil, the
more free speech, free press, fair elections, an independent judiciary, the rule of
law, and independent political parties are eroded” (Friedman, 2006:29).
A similar assertion was made earlier by Auty (2004:13): “oil wealth is and can
be often ill-managed, but as countries run out of oil they are increasingly
becoming democratised and open to free trade and develop superior prospects
for economic growth and sustainability” Bahrain, for example, is the rst Gulf
State to overhaul its labour laws in accordance with international labour stan-
dards. The current unrest, however, may be linked to the Kingdom's relatively
small oil and gas production revenue that is insufcient for public spending
without raising taxes, and the ruling class was seen amassing the dwindling
wealth at the expense of the majority of the country's 1.3 million inhabitants.
78 M. Chindo et al. The Nigerian Extractive Economy 79
the experience of these countries over the past several decades shows dramatical
drop in path to development (Auty, 1994; Ahrend, 2005). This is particularly the
case in the developing countries where countries with rich minerals suffers from
a low level of human and capital development. The contribution of resources to
development in these countries has become subject to intense enquiry, which is a
reection of the complex issues surrounding mineral extraction, the challenge
of maximising benets, and the sustainable development of particularly local
communities. The next part of this paper highlights the transition from
resource wealth to resource curse.
The Resource Curse Phenomenon
According to Auty (2001a), resource endowment can bring a huge wealth to
countries and can be a valuable development asset. Considering the rising
mineral prices and increasing revenue to resource-rich countries, this view was
challenged, as it was observed that resource-rich countries grew more slowly
than resource-poor countries. In this case, this paper simplies the various
opposing arguments that resources are a curse rather than a blessing into
'conventional' and 'alternative' views.
Prior to 1980s, the conventional view, using modernisation theory, argues
that large revenue from mineral wealth through rents should generate substan-
tial wealth for the economy, which would translate to economic prosperity,
poverty reduction and service delivery, just like the path taken by the developed
nations. Furthermore, it explains that mineral reserves can be mined protably
as part of a country's stock of natural capital, along with agricultural land,
forests, and other natural resources. Proponents of this view, known as the big
push theorists (see, for example, Rosenstein-Rodan, 1943), suggested that
mineral endowment would industrialise the developing countries based on
revenue windfalls from extractive activities. Likewise, Rostow's (1960) third of
the 've-stage development model' argued that the presence of abundant
natural resources would allow developing countries to 'take off' (a transitional
stage) similar to Britain's course to development. No doubt, resources have
historically played a vital role in the economic success of resource-rich countries,
such as in Canada, Australia, Norway and the United States. However, the global
economy has changed signicantly since the nineteenth century, and assump-
tions based on historical analogy that all resource-rich countries will take the
same path to development are misleading (Power, 2002).
Empirical studies undertaken by the International Council on Mining and
Metals (ICMM), United Nations Conference on Trade and Development
(UNCTAD) and the Overseas Development Institute (ODI) (2006), among
others, established that mineral extraction provides economic growth and
poverty eradication opportunities to countries that are at their early stages of
development. This was based on case studies where the mineral industry is
bringing about economic prosperity. Surely the above are examples of countries
that have managed to avoid the curse. For example, Ross (2001:62) admitted
that: “some states with large extractive industries - like Botswana, Chile and
Malaysia - have overcome many of the obstacles …and implemented sound pro-
poor strategies”. Other similar instances include Indonesia (Temple, 2001) and
Norway (Wright and Czelusta, 2002). Likewise, emerging oil economies such as
Angola,Uganda, Peru, Tanzania and Ghana are likely to benet from their
resources if they can learn from Nigeria, Libya and Iraq the kind of challenges
that confront African countries that seek to exclusively depend oil or other
mineral wealth as a catalyst for fostering economic growth and development.
The alternative view is more negative about the ability of mineral revenues to
promote economic prosperity. While Richard Auty was the rst to use the term
'resource curse' in economic literature to show why resource wealth hinders
economic growth and development, Sachs and Warner (1995) are among the
rst authors to use cross-country evidence for the resource curse phenomenon.
An earlier study by Auty (1990) found that per capita income of non-mineral
producing nations is two to three times higher than that of the mineral econo-
mies. The publication of their evidence heralded the emergence of an extensive
body of literature that sought to explain their ndings (see for example, Auty,
2001a,b) in different perspectives (see for example, Brunnschewiler, 2008;
Stevens, 2003). Stevens (2003) has questioned the robustness of the ndings of
Auty (2001a) on the basis of the denition of resource-intensity, and the time
period chosen for their analysis. The resource curse thesis, however, offers a
diverse set of explanations covering, amongst others, terms of trade effects,
Dutch disease (the decay and diminishing contribution of other sectors other
than oil in the economy), internal conict, human rights, debt overhang,
institutional quality, corruption and rent-seeking behaviour.
Conversely, modern analysts such as Watts (2008) and Orogun (2010)
considered the advent of oil as leading to weakening nascent democratic
institutions, repressing political policies, poor and opaque public nance and
corruption by elites in 'Petrostates' (Watt, 2008). Nigeria, Venezuela, Sierra
Leone, Angola, and Niger are common examples of mineral economies associ-
ated with poor economic growth, conict and under-development. Thomas
Friedman; New York Times columnist, having studied crude oil prices in
relation to freedom and political powers in Iran, Iraq, Venezuela, Nigeria and
Russia for three decades, identied a First Law of Petropolitics. In this law,
Friedman argued that: “the higher the average global crude price of oil, the
more free speech, free press, fair elections, an independent judiciary, the rule of
law, and independent political parties are eroded” (Friedman, 2006:29).
A similar assertion was made earlier by Auty (2004:13): “oil wealth is and can
be often ill-managed, but as countries run out of oil they are increasingly
becoming democratised and open to free trade and develop superior prospects
for economic growth and sustainability” Bahrain, for example, is the rst Gulf
State to overhaul its labour laws in accordance with international labour stan-
dards. The current unrest, however, may be linked to the Kingdom's relatively
small oil and gas production revenue that is insufcient for public spending
without raising taxes, and the ruling class was seen amassing the dwindling
wealth at the expense of the majority of the country's 1.3 million inhabitants.
80 M. Chindo et al. The Nigerian Extractive Economy 81
Rationale for the Nigerian Resource Curse
The transition to resource curse can be broken into behavioural, state-centred
and social capital perspectives (Rosser, 2006) - Nigeria incorporates each of
these. The behaviouralist perspective places blame on the attitude of rent-
seeking political actors in the context of natural resource wealth (UNDP, 2006).
The concentration of capital ownership among political elites reproduces social
inequalities between those inside the elite (mostly politicians) and those outside
it. This explains why the already existing income inequalities tend to expand
(Auty, 1994), as in the Nigerian situation, Omeje (2006:2) referred to it as an
'alliance of dominant social class forces', which include top politicians, retired
military, technocrats and international capital, that contribute to the spate of
military coups and political instability and have continued to dictate and share
power - neglecting their responsibilities to the people. Political instability has
hampered long-term reform and planning either by the same government or
succeeding governments. Nigeria since its independence in 1960, has had 14
governments, out of which eight were as a result of military coups.
Shamsuddeen (2007) for example, blames the curse on the four decades of
dictatorial military rule because their style of leadership gives limited room for
participation in governance. It was only from 2007 that democratically elected
government transfers power to another elected government since independ-
ence. However, the 'dominant class force' or 'rentier elites' continues to dictate
and share power amongst themselves (see Ebohon, 2013 on how government
bureaucracy has turned into a rentier class).
Based on a mixture of cognitive, societal, and institutional arguments, state-
centred explanations elucidate how over-reliance on resource rents can inhibit
the development of sound economic policies, increase public spending through
ill co-ordinated decisions, and result in less accountability and transparency,
corruption and wastes (Auty, 2001b). A notable example of waste is the accumu-
lation of physical capital coinciding with the periods of two major oil price
shocks between 1973 and 1980. Public investment, the majority owned by
government, has increased by about seven per cent of the GDP during the shock
period. However, more than half of the investments are consistently wasted due
to over-investment and poor productivity.
The major problem in Nigeria, according to Sala-i-Martin and Subramanian
(2003:17) is that “oil revenues that the government gets are regarded as manna
from heaven which tends to corrupt institutions and lower the long-term growth
prospects”.The state-centred explanation also contends that oil extraction
generates large streams of foreign exchange, and these large ows become the
basis for patronage that supports dictatorship and autocracy, and less account-
ability to the societies they govern. Governance failure and complete lack of
public accountability can be the main reasons for the failure of resource wealth
to translate into development. Instead, Ross (2001) argues, part of the revenue
surplus is used in suppressing opposition through tax policies and surplus
campaign spending. Further, Ross (2001) believe that the reduction or elimina-
tion of taxes by governments is a strategy of making people less likely to hold
the government accountable to them.
The social capital perspective argues that access to and the struggle for
ownership of natural resources creates conicts (Jensen and Watchenko, 2004).
Jensen and Watchenko (2004) make a further suggestion that the concentration
of power among the few makes it rational for the opposition to pursue power
through extra-constitutional means.
Also, it gives rise to agitation over the acquisition of a fair share of the natural
resources revenue. Similarly, separatist tendencies may arise with the feeling
that resources revenue has been siphoned from the producing region to the
capital or abroad. These views have in part led to conict and instability in the
Nigerian Niger Delta (Orogun, 2010; Watts, 2008). The Niger Delta in contrast
with the oil richness of the region is regrettably, one of the annoying examples
of the resource curse. The region suffers “administrative neglect, crumbling
social infrastructure and services, high unemployment, social deprivation, abject
poverty, lth and squalor, and endemic conict” (UNDP, 2006:9). Current
mining activities around the country disclose the possibility of heightening the
Niger Delta crises because of the centralisation of the initial extractive activities,
and the lack of consultation with the communities (Chindo and Bradshaw,
2013).
Evidence exist to show that commodity price volatility has a negative effect
on the economic growth of mineral economies (Santos, 2010). Instead of saving
the excess revenue during the boom period for the future, the boom cycle
encourages governments to initiate immediate, often short-term, unrealistic
expenditures. This leads to a spending spree including embarking on high-cost
infrastructure projects (often called white elephant projects) that may be
nanced by external debts. More importantly in this context, Palley (2006:5)
argued that “making unproductive investments and unplanned spending is the
vehicle for corruption and inuence peddling.
The net result is loss of scal discipline that contributes to ination, the
build-up of external indebtedness, and the development of cultures of corrup-
tion”. This way, macroeconomic scholars (such as Davis, 1995) believe the Dutch
disease sets in, because the additional wealth generated induces exchange rate
volatility which, if uncontrolled, harms domestic production in the long-run.
As a result of rent-seeking activities and mentality, the state largely neglects
its responsibilities to the people in “preference for the interest of international
capital and the self-seeking interests of state ofcials and the hegemonic elites”
(Omeje, 2006:2). Furthermore, Ko (2014) argued that tremendous oil wealth
has over the years impeded or dismantled true federalism in Nigeria. For
example, Nigeria's federal structure was instituted as a way of balancing eco-
nomic and political freedom, such that: 1) there is equal and fair distribution of
national wealth irrespective of where it is located, 2) each region from the six
geopolitical zones (north-central, north-east, north-west, south-east, south-south,
south-west) is not disadvantaged in the political process and in public policy, 3)
responsibilities are shared equally in the creation of national income and 4) no
region with minority population is suppressed from majority rule or disenfran-
chised from political and economic processes (Onoh,1983). The
overdependence on oil resource has dismantled the above traits of federalism
and is currently characterised by conict, inequality in the allocation and
distribution of national wealth, centralised power among rentier elites and
repression. This situation was also was corroborated by Obi (2007:10):
80 M. Chindo et al. The Nigerian Extractive Economy 81
Rationale for the Nigerian Resource Curse
The transition to resource curse can be broken into behavioural, state-centred
and social capital perspectives (Rosser, 2006) - Nigeria incorporates each of
these. The behaviouralist perspective places blame on the attitude of rent-
seeking political actors in the context of natural resource wealth (UNDP, 2006).
The concentration of capital ownership among political elites reproduces social
inequalities between those inside the elite (mostly politicians) and those outside
it. This explains why the already existing income inequalities tend to expand
(Auty, 1994), as in the Nigerian situation, Omeje (2006:2) referred to it as an
'alliance of dominant social class forces', which include top politicians, retired
military, technocrats and international capital, that contribute to the spate of
military coups and political instability and have continued to dictate and share
power - neglecting their responsibilities to the people. Political instability has
hampered long-term reform and planning either by the same government or
succeeding governments. Nigeria since its independence in 1960, has had 14
governments, out of which eight were as a result of military coups.
Shamsuddeen (2007) for example, blames the curse on the four decades of
dictatorial military rule because their style of leadership gives limited room for
participation in governance. It was only from 2007 that democratically elected
government transfers power to another elected government since independ-
ence. However, the 'dominant class force' or 'rentier elites' continues to dictate
and share power amongst themselves (see Ebohon, 2013 on how government
bureaucracy has turned into a rentier class).
Based on a mixture of cognitive, societal, and institutional arguments, state-
centred explanations elucidate how over-reliance on resource rents can inhibit
the development of sound economic policies, increase public spending through
ill co-ordinated decisions, and result in less accountability and transparency,
corruption and wastes (Auty, 2001b). A notable example of waste is the accumu-
lation of physical capital coinciding with the periods of two major oil price
shocks between 1973 and 1980. Public investment, the majority owned by
government, has increased by about seven per cent of the GDP during the shock
period. However, more than half of the investments are consistently wasted due
to over-investment and poor productivity.
The major problem in Nigeria, according to Sala-i-Martin and Subramanian
(2003:17) is that “oil revenues that the government gets are regarded as manna
from heaven which tends to corrupt institutions and lower the long-term growth
prospects”.The state-centred explanation also contends that oil extraction
generates large streams of foreign exchange, and these large ows become the
basis for patronage that supports dictatorship and autocracy, and less account-
ability to the societies they govern. Governance failure and complete lack of
public accountability can be the main reasons for the failure of resource wealth
to translate into development. Instead, Ross (2001) argues, part of the revenue
surplus is used in suppressing opposition through tax policies and surplus
campaign spending. Further, Ross (2001) believe that the reduction or elimina-
tion of taxes by governments is a strategy of making people less likely to hold
the government accountable to them.
The social capital perspective argues that access to and the struggle for
ownership of natural resources creates conicts (Jensen and Watchenko, 2004).
Jensen and Watchenko (2004) make a further suggestion that the concentration
of power among the few makes it rational for the opposition to pursue power
through extra-constitutional means.
Also, it gives rise to agitation over the acquisition of a fair share of the natural
resources revenue. Similarly, separatist tendencies may arise with the feeling
that resources revenue has been siphoned from the producing region to the
capital or abroad. These views have in part led to conict and instability in the
Nigerian Niger Delta (Orogun, 2010; Watts, 2008). The Niger Delta in contrast
with the oil richness of the region is regrettably, one of the annoying examples
of the resource curse. The region suffers “administrative neglect, crumbling
social infrastructure and services, high unemployment, social deprivation, abject
poverty, lth and squalor, and endemic conict” (UNDP, 2006:9). Current
mining activities around the country disclose the possibility of heightening the
Niger Delta crises because of the centralisation of the initial extractive activities,
and the lack of consultation with the communities (Chindo and Bradshaw,
2013).
Evidence exist to show that commodity price volatility has a negative effect
on the economic growth of mineral economies (Santos, 2010). Instead of saving
the excess revenue during the boom period for the future, the boom cycle
encourages governments to initiate immediate, often short-term, unrealistic
expenditures. This leads to a spending spree including embarking on high-cost
infrastructure projects (often called white elephant projects) that may be
nanced by external debts. More importantly in this context, Palley (2006:5)
argued that “making unproductive investments and unplanned spending is the
vehicle for corruption and inuence peddling.
The net result is loss of scal discipline that contributes to ination, the
build-up of external indebtedness, and the development of cultures of corrup-
tion”. This way, macroeconomic scholars (such as Davis, 1995) believe the Dutch
disease sets in, because the additional wealth generated induces exchange rate
volatility which, if uncontrolled, harms domestic production in the long-run.
As a result of rent-seeking activities and mentality, the state largely neglects
its responsibilities to the people in “preference for the interest of international
capital and the self-seeking interests of state ofcials and the hegemonic elites”
(Omeje, 2006:2). Furthermore, Ko (2014) argued that tremendous oil wealth
has over the years impeded or dismantled true federalism in Nigeria. For
example, Nigeria's federal structure was instituted as a way of balancing eco-
nomic and political freedom, such that: 1) there is equal and fair distribution of
national wealth irrespective of where it is located, 2) each region from the six
geopolitical zones (north-central, north-east, north-west, south-east, south-south,
south-west) is not disadvantaged in the political process and in public policy, 3)
responsibilities are shared equally in the creation of national income and 4) no
region with minority population is suppressed from majority rule or disenfran-
chised from political and economic processes (Onoh,1983). The
overdependence on oil resource has dismantled the above traits of federalism
and is currently characterised by conict, inequality in the allocation and
distribution of national wealth, centralised power among rentier elites and
repression. This situation was also was corroborated by Obi (2007:10):
82 M. Chindo et al. The Nigerian Extractive Economy 83
“Within Nigeria, oil has featured prominently in the politics within and between the
various tiers of the federal government, particularly as it relates to the principles for
controlling and sharing the oil wealth between the oil producing and non-oil
producing parts of the country. This touches upon issues of inter-ethnic relations and
the distribution of power in a multi-ethnic federation. The case of the escalating
violence in the oil-rich ethnic minority Niger Delta region of Nigeria, where the
conict over the control of oil is assuming the dimension of an incipient insurgency,
aptly captures some of the fall-outs from disputes over the sharing of oil revenues”.
Solutions to the Resource Curse and the Missing Link
A number of solutions for transforming the resource curse into a blessing have
been proffered. Several scholars have focused on sound economic policy
changes (Auty, 1995), diversication (Veit et al., 2011), the creation of stabilisa-
tion funds (Santos, 2010; Skancke, 2003), introduction of neo-liberal economic
policies (UNDP, 2006) and the reform of governance and social structures
(McPhail, 2008). Other scholars have called for international intervention to
reduce the curse (Bannon and Collier, 2003:10), and Auty (2004: 46) has
supported the use of international certication processes, such as the Kimberley
Process Certication Scheme. According to Müller (2010), the
institutionalisation of best practices such as the EITI is a means to overcome lack
of transparency and corruption in the management of resource wealth.
While the above suggestions proffered can foster development in Nigeria,
they tend to centre at the national level and at the point when the resource is
fully operational (see for example, Auty, 1997; Collier, 2007), neglecting the
resource producing communities that bear the brunt of the curse. Resource
curse theories and empirical studies of this nature typically rely on national
statistics to analyse the relationship between resource abundance and growth on
the basis of cross-country, comparative studies of growth etc. As Davis and Tilton
(2005) argue, while mineral extraction might benet a nation as a whole, local
communities usually bear the costs. It is therefore; appropriate to consider the
local scale at which these impacts may occur. Hitherto, most of the research on
resource impacts in Nigeria focused on the effects of oil extraction on Niger
Delta communities. For example, the works of Watts (2008), UNDP (2006),
Amnesty International (2009) and UNEP (2011) are the most comprehensive
examples of the analysis of oil extraction and the resulting impact on Niger
Delta communities.
This paper, therefore, advocates for the expansion of the resource curse
thesis to cover different geographical scales. The focus of studies on communi-
ties extends the resource curse thesis by considering local issues that can hinder
or help a national economy's ability to manage resources for development. As
Davis and Tilton (2005) argue, local communities usually bear the cost of
resource extraction. Therefore, measuring the 'resource curse' phenomenon at
host-community level would add to the body of knowledge on the local scale of
resource curse, as against relying only on country-level measurements as in the
work by Auty (1993). Empirical studies and analysis of the communities,
together with national studies may show that Nigerian resource curse can be
categorised under any of the following propositions:
Ÿnationally-cursed, locally-cursed;
Ÿnationally-blessed, locally-blessed;
Ÿnationally-cursed, locally-blessed;
Ÿnationally-blessed, locally-curse.
For example, Amnesty International (2009) links decades of oil extraction in
the Niger Delta to human rights violations/conicts on account of environmental
damage and pollution. The UNEP (2011) report depicts the devastating effects
of long-term oil pollution on the local communities, mainly due to failure in
monitoring oil activities. According to UNDP (2006:9), the Niger Delta commu-
nities may suffers; “administrative neglect, crumbling social infrastructure and
services, high unemployment, social deprivation, abject poverty, lth and
squalor, and endemic conict”. These reports, which posits that oil wealth fuels
state corruption, proigacy, social crises, economic deprivation and violent civil
conict, it can then be inferred that Nigeria suffers from the curse of its
abundant resources from national to local/community level. They also provide
the ground for locally based studies in support of the expansion of the resource
curse thesis to cover different geographical scales and help identify more
detailed gaps in knowledge.
Conclusion
Evidence suggests that resource-rich countries face the challenges of harnessing
mineral revenues to boost development, and that some of those countries suffer
from the resource curse. While the literature reviewed here extensively covered
the resource-development phenomena, two limitations can be identied in the
context of Nigeria: 1) generalisations are based on national issues while the
impacts are experienced at the local level; and 2) little attention has been paid to
the initial processes of resource development and where the resource is found.
This paper calls for the attention of scholars particularly to the latter limitation,
in order to add to the body of knowledge on the potential contribution of
resources to the Nigerian economy, and their local impacts. Nigeria is currently
in the process of expanding and developing its huge non-fuel resources, which
will have an adverse impact on existing communities and the environment. The
ndings could lead to recommendations that can minimise or eliminate resource
curse tendencies at the local level. Resources can only contribute to sustainable
development when extractions are implemented well, the affected people's
rights are preserved, and if the benets generated from such resources are well-
used.
References
Abubakar, MB 2014, Petroleum Potentials of the Nigerian Benue Trough and Anambra
Basin: A Regional Synthesis, Natural Resources, vol. 5, pp. 25.
Ahrend, R 2005, Sustaining growth in a resource-based economy: the main issues and
the specic case of Russia, in discussion paper series no. 3, United Nations Economic
Commission for Europe, Geneva.
Aldagheiri, MI 2008, Economic diversication in resource abundant economies: the case study of
82 M. Chindo et al. The Nigerian Extractive Economy 83
“Within Nigeria, oil has featured prominently in the politics within and between the
various tiers of the federal government, particularly as it relates to the principles for
controlling and sharing the oil wealth between the oil producing and non-oil
producing parts of the country. This touches upon issues of inter-ethnic relations and
the distribution of power in a multi-ethnic federation. The case of the escalating
violence in the oil-rich ethnic minority Niger Delta region of Nigeria, where the
conict over the control of oil is assuming the dimension of an incipient insurgency,
aptly captures some of the fall-outs from disputes over the sharing of oil revenues”.
Solutions to the Resource Curse and the Missing Link
A number of solutions for transforming the resource curse into a blessing have
been proffered. Several scholars have focused on sound economic policy
changes (Auty, 1995), diversication (Veit et al., 2011), the creation of stabilisa-
tion funds (Santos, 2010; Skancke, 2003), introduction of neo-liberal economic
policies (UNDP, 2006) and the reform of governance and social structures
(McPhail, 2008). Other scholars have called for international intervention to
reduce the curse (Bannon and Collier, 2003:10), and Auty (2004: 46) has
supported the use of international certication processes, such as the Kimberley
Process Certication Scheme. According to Müller (2010), the
institutionalisation of best practices such as the EITI is a means to overcome lack
of transparency and corruption in the management of resource wealth.
While the above suggestions proffered can foster development in Nigeria,
they tend to centre at the national level and at the point when the resource is
fully operational (see for example, Auty, 1997; Collier, 2007), neglecting the
resource producing communities that bear the brunt of the curse. Resource
curse theories and empirical studies of this nature typically rely on national
statistics to analyse the relationship between resource abundance and growth on
the basis of cross-country, comparative studies of growth etc. As Davis and Tilton
(2005) argue, while mineral extraction might benet a nation as a whole, local
communities usually bear the costs. It is therefore; appropriate to consider the
local scale at which these impacts may occur. Hitherto, most of the research on
resource impacts in Nigeria focused on the effects of oil extraction on Niger
Delta communities. For example, the works of Watts (2008), UNDP (2006),
Amnesty International (2009) and UNEP (2011) are the most comprehensive
examples of the analysis of oil extraction and the resulting impact on Niger
Delta communities.
This paper, therefore, advocates for the expansion of the resource curse
thesis to cover different geographical scales. The focus of studies on communi-
ties extends the resource curse thesis by considering local issues that can hinder
or help a national economy's ability to manage resources for development. As
Davis and Tilton (2005) argue, local communities usually bear the cost of
resource extraction. Therefore, measuring the 'resource curse' phenomenon at
host-community level would add to the body of knowledge on the local scale of
resource curse, as against relying only on country-level measurements as in the
work by Auty (1993). Empirical studies and analysis of the communities,
together with national studies may show that Nigerian resource curse can be
categorised under any of the following propositions:
Ÿnationally-cursed, locally-cursed;
Ÿnationally-blessed, locally-blessed;
Ÿnationally-cursed, locally-blessed;
Ÿnationally-blessed, locally-curse.
For example, Amnesty International (2009) links decades of oil extraction in
the Niger Delta to human rights violations/conicts on account of environmental
damage and pollution. The UNEP (2011) report depicts the devastating effects
of long-term oil pollution on the local communities, mainly due to failure in
monitoring oil activities. According to UNDP (2006:9), the Niger Delta commu-
nities may suffers; “administrative neglect, crumbling social infrastructure and
services, high unemployment, social deprivation, abject poverty, lth and
squalor, and endemic conict”. These reports, which posits that oil wealth fuels
state corruption, proigacy, social crises, economic deprivation and violent civil
conict, it can then be inferred that Nigeria suffers from the curse of its
abundant resources from national to local/community level. They also provide
the ground for locally based studies in support of the expansion of the resource
curse thesis to cover different geographical scales and help identify more
detailed gaps in knowledge.
Conclusion
Evidence suggests that resource-rich countries face the challenges of harnessing
mineral revenues to boost development, and that some of those countries suffer
from the resource curse. While the literature reviewed here extensively covered
the resource-development phenomena, two limitations can be identied in the
context of Nigeria: 1) generalisations are based on national issues while the
impacts are experienced at the local level; and 2) little attention has been paid to
the initial processes of resource development and where the resource is found.
This paper calls for the attention of scholars particularly to the latter limitation,
in order to add to the body of knowledge on the potential contribution of
resources to the Nigerian economy, and their local impacts. Nigeria is currently
in the process of expanding and developing its huge non-fuel resources, which
will have an adverse impact on existing communities and the environment. The
ndings could lead to recommendations that can minimise or eliminate resource
curse tendencies at the local level. Resources can only contribute to sustainable
development when extractions are implemented well, the affected people's
rights are preserved, and if the benets generated from such resources are well-
used.
References
Abubakar, MB 2014, Petroleum Potentials of the Nigerian Benue Trough and Anambra
Basin: A Regional Synthesis, Natural Resources, vol. 5, pp. 25.
Ahrend, R 2005, Sustaining growth in a resource-based economy: the main issues and
the specic case of Russia, in discussion paper series no. 3, United Nations Economic
Commission for Europe, Geneva.
Aldagheiri, MI 2008, Economic diversication in resource abundant economies: the case study of
84 M. Chindo et al. The Nigerian Extractive Economy 85
the minerals industry in Saudi Arabia, PhD Thesis, University of Leicester, UK.
Amnesty International 2009, Nigeria: petroleum, pollution and poverty in the Niger Delta,
Amnesty international publications, London.
Auty, RM 1990, Resource based industrialisation: sowing the oil in eight developing countries,
Claredon Press, Oxford.
Auty, RM 1993, Sustaining development in minerals economics: the resource curse thesis,
Routledge, London.
Auty, RM 1994, Industrial policy reform in six large newly industrialised countries: the
resource curse thesis, World Development, vol. 12, pp. 11-26.
Auty, RM 2001a, The political economy of resource-driven growth, European Economic
Review, vol. 45, no. 4, pp. 839-846.
Auty, RM 2001b, The political state and the management of mineral rents in capital-
surplus economies: Botswana and Saudi Arabia, Resource Policy, vol. 27, pp. 77-86.
Auty, RM 2004, The political economy of growth collapses in mineral economies, Minerals
& Energy - Raw Materials Report, vol. 19, no. 4, pp.3-15.
Ayoade, E 2007, Bitumen resources of Nigeria: status report, Senate Committee on Solid
Minerals, Abuja, Nigeria.
Bannon, I & Collier, P 2003, Natural resources and violent conict: options and actions, World
Bank, Washington DC.
Bhappu, RR & Guzman, J 1995, Mineral investment decision making, Engineering and
Mining Journal, vol. 7, pp. 36-38.
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London.
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st nd
Daniels et al (eds) An Introduction to Human Geography: Issues for the 21 century, 2 edn.
Section 2.
Bradshaw, MJ 2013, Global energy dilemmas, John Wiley & Sons.
Brunnschewiler, C & Bulte, E 2008, The resource curse revisited and revised: a tale of
paradoxes and red herrings, Journal of Environmental Economics and Management, vol. 55,
pp. 248-264.
Chindo, M & Bradshaw, MJ 2013, Communities: A Case Study of Oil Sands in Nigeria, in
R Dannreuther & W Ostrowski (eds) 2013 Global Resources: Conict and Cooperation, ch.
7, pp. 140-158, Palgrave Macmillan, Hampshire.
Costa Lima, GA & Suslick, SB 2006, Estimating the volatility of mining projects consider-
ing price and operating cost uncertainties, Resources Policy, vol. 31, no. 2, pp. 86-94.
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242.
Davis, G 1995, Learning to love the Dutch Disease: evidence from the mineral econo-
mies, World Development, vol. 23, no. 10, pp. 1765-1779.
Ebohon, SI 2013, State and Rentier Capitalism in Nigeria: The Political Economy of
Hydrocarbon Nationalism and Dependence Reproduction, Journal of Third World
Studies, vol. 30, no. 1, pp. 209.
Edwik, AA 2007, Oil dependency, economic diversication and development: a case study of Libya,
PhD Thesis, University of Salford, UK.
EITI (Extractive Industries Transparency Initiative) 2005, Source book, viewed 14
February 2008, http://eitransparency.org/document/sourcebook.
Esteves, AM 2008, Mining and social development: Refocusing community investment
using multi-criteria decision analysis, Resources Policy, vol. 33, no. 1, pp. 39-47.
Friedland, R 2008, Mining super cycle opportunities to continue into the future, in World
Mining Investment Congress, 3-5 June, London, England.
Friedman, T 2006, The rst law of petropolitics, Foreign policy, May/June, pp.29.
Hvidt, M 2013, Economic diversication in GCC countries: Past record and future trends,
London School of Economics and Political Science (LSE), London.
ICMM (International Council on Mining and Metals) 2007, Good Practice Guidance for
Mining and Biodiversity, ICMM, London.
Jensen, N & Watchenko, L 2004, Resource wealth and political regimes in Africa,
Comparative Political Studies, vol. 37, pp. 816- 841.
Ko, V 2014, Nigeria's “Resource Curse”, Oil as Impediment to True Federalism. E-International
relations students, viewed 27 October 2014, http://www.e-ir.info/2014/07/20/nigerias-
resource-curse-oil-as-impediment-to-true-federalism/.
Mahtani, D 2008, The new scramble for Africa's resources, Financial Times Special Report,
28 Jan. pp. 1-6.
McPhail, K 2008, Global governance challenges in industry sectors and supply chains
contributing to sustainable development through multi-stakeholder processes: practical
steps to avoid the ''resource curse'', Corporate governance, vol. 8, no. 4, pp. 471-481.
Meyer, R, Attanasi, E & Freeman, P 2007, Heavy oil and natural bitumen resources in
geological basins of the World, US Geological Survey Open-File Report 2007-1084, pp. 3-
36, viewed 10 July 2009, http://pubs.usgs.gov/of/2007/1084/.
Morgan, PG 2002, Mineral title management—the key to attracting foreign mining
investment in developing countries?, Applied Earth Science: Transactions of the Institutions
of Mining and Metallurgy: Section B, vol. 111, no. 3, pp. 165-170.
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http://tinyurl.com/q487mpu.
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minerals, MSMD, Abuja.
Müller, M 2010, Revenue transparency to mitigate the resource curse in the Niger Delta?
Potential and reality of NEITI, in Bonn International Centre for Conversion (BICC) GmbH,
Occasional Paper V. June 2010.
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Domestic Product for Nigeria, NBS Headquarters, Abuja.
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Abuja.
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Nda-Isaiah, S 2013, Nigeria: What Happens in 10 Years When We Hit 250 Million and Oil Sells
for $15?, viewed 9 February 2014, http://tinyurl.com/otx4s5w.
NNPC (Nigerian National Petroleum Corporation) 2014, Development of Nigeria's oil
industry, viewed 30 October 2014, http://tinyurl.com/ogklhow.
Obaje, N 2009, Geology and mineral resources of Nigeria, Springer, London.
Obaje, NG, Attah, DO, Opeloye, SA & Moumouni, A 2006, Geochemical evaluation of the
hydrocarbon prospects of sedimentary basins in Northern Nigeria, Geochemical Journal,
vol. 40, no. 3, pp. 227-243.
Obaje, NG, Wehner, H, Scheeder, G, Abubakar, MB & Jauro, A 2004, Hydrocarbon
prospectivity of Nigeria's inland basins: From the viewpoint of organic geochemistry
and organic petrology, AAPG bulletin, vol. 88, no. 3, pp. 325-353.
ODI (Overseas Development Institute) 2006, Does the Sustained Global Demand for Oil, Gas
84 M. Chindo et al. The Nigerian Extractive Economy 85
the minerals industry in Saudi Arabia, PhD Thesis, University of Leicester, UK.
Amnesty International 2009, Nigeria: petroleum, pollution and poverty in the Niger Delta,
Amnesty international publications, London.
Auty, RM 1990, Resource based industrialisation: sowing the oil in eight developing countries,
Claredon Press, Oxford.
Auty, RM 1993, Sustaining development in minerals economics: the resource curse thesis,
Routledge, London.
Auty, RM 1994, Industrial policy reform in six large newly industrialised countries: the
resource curse thesis, World Development, vol. 12, pp. 11-26.
Auty, RM 2001a, The political economy of resource-driven growth, European Economic
Review, vol. 45, no. 4, pp. 839-846.
Auty, RM 2001b, The political state and the management of mineral rents in capital-
surplus economies: Botswana and Saudi Arabia, Resource Policy, vol. 27, pp. 77-86.
Auty, RM 2004, The political economy of growth collapses in mineral economies, Minerals
& Energy - Raw Materials Report, vol. 19, no. 4, pp.3-15.
Ayoade, E 2007, Bitumen resources of Nigeria: status report, Senate Committee on Solid
Minerals, Abuja, Nigeria.
Bannon, I & Collier, P 2003, Natural resources and violent conict: options and actions, World
Bank, Washington DC.
Bhappu, RR & Guzman, J 1995, Mineral investment decision making, Engineering and
Mining Journal, vol. 7, pp. 36-38.
BP (British Petroleum) 2010, BP statistical review of world energy 2010, British Petroleum.
London.
Bradshaw, MJ 2005, Population, resources, development and the environment, in P
st nd
Daniels et al (eds) An Introduction to Human Geography: Issues for the 21 century, 2 edn.
Section 2.
Bradshaw, MJ 2013, Global energy dilemmas, John Wiley & Sons.
Brunnschewiler, C & Bulte, E 2008, The resource curse revisited and revised: a tale of
paradoxes and red herrings, Journal of Environmental Economics and Management, vol. 55,
pp. 248-264.
Chindo, M & Bradshaw, MJ 2013, Communities: A Case Study of Oil Sands in Nigeria, in
R Dannreuther & W Ostrowski (eds) 2013 Global Resources: Conict and Cooperation, ch.
7, pp. 140-158, Palgrave Macmillan, Hampshire.
Costa Lima, GA & Suslick, SB 2006, Estimating the volatility of mining projects consider-
ing price and operating cost uncertainties, Resources Policy, vol. 31, no. 2, pp. 86-94.
Davenport, J 2010, Nigeria aiming to grow mining's GDP contribution to 15% by 2015,
Mining Weekly, March 15, viewed 20 April 2010, http://bit.ly/hGZL48.
Davis, G & Tilton, J 2005, The resource curse, Natural Resources Forum, vol. 29, pp. 233-
242.
Davis, G 1995, Learning to love the Dutch Disease: evidence from the mineral econo-
mies, World Development, vol. 23, no. 10, pp. 1765-1779.
Ebohon, SI 2013, State and Rentier Capitalism in Nigeria: The Political Economy of
Hydrocarbon Nationalism and Dependence Reproduction, Journal of Third World
Studies, vol. 30, no. 1, pp. 209.
Edwik, AA 2007, Oil dependency, economic diversication and development: a case study of Libya,
PhD Thesis, University of Salford, UK.
EITI (Extractive Industries Transparency Initiative) 2005, Source book, viewed 14
February 2008, http://eitransparency.org/document/sourcebook.
Esteves, AM 2008, Mining and social development: Refocusing community investment
using multi-criteria decision analysis, Resources Policy, vol. 33, no. 1, pp. 39-47.
Friedland, R 2008, Mining super cycle opportunities to continue into the future, in World
Mining Investment Congress, 3-5 June, London, England.
Friedman, T 2006, The rst law of petropolitics, Foreign policy, May/June, pp.29.
Hvidt, M 2013, Economic diversication in GCC countries: Past record and future trends,
London School of Economics and Political Science (LSE), London.
ICMM (International Council on Mining and Metals) 2007, Good Practice Guidance for
Mining and Biodiversity, ICMM, London.
Jensen, N & Watchenko, L 2004, Resource wealth and political regimes in Africa,
Comparative Political Studies, vol. 37, pp. 816- 841.
Ko, V 2014, Nigeria's “Resource Curse”, Oil as Impediment to True Federalism. E-International
relations students, viewed 27 October 2014, http://www.e-ir.info/2014/07/20/nigerias-
resource-curse-oil-as-impediment-to-true-federalism/.
Mahtani, D 2008, The new scramble for Africa's resources, Financial Times Special Report,
28 Jan. pp. 1-6.
McPhail, K 2008, Global governance challenges in industry sectors and supply chains
contributing to sustainable development through multi-stakeholder processes: practical
steps to avoid the ''resource curse'', Corporate governance, vol. 8, no. 4, pp. 471-481.
Meyer, R, Attanasi, E & Freeman, P 2007, Heavy oil and natural bitumen resources in
geological basins of the World, US Geological Survey Open-File Report 2007-1084, pp. 3-
36, viewed 10 July 2009, http://pubs.usgs.gov/of/2007/1084/.
Morgan, PG 2002, Mineral title management—the key to attracting foreign mining
investment in developing countries?, Applied Earth Science: Transactions of the Institutions
of Mining and Metallurgy: Section B, vol. 111, no. 3, pp. 165-170.
Moss, T 2014, How Much Power Does Power Africa Really Need?, viewed 20 February 2014,
http://tinyurl.com/q487mpu.
MSMD (Ministry of Solid Minerals Development) 2008, Solid minerals sector: our 34
minerals, MSMD, Abuja.
Müller, M 2010, Revenue transparency to mitigate the resource curse in the Niger Delta?
Potential and reality of NEITI, in Bonn International Centre for Conversion (BICC) GmbH,
Occasional Paper V. June 2010.
NBS (National Bureau of Statistics) 2010, Revised 2009 and estimates for Q1- Q3, 2010 Gross
Domestic Product for Nigeria, NBS Headquarters, Abuja.
NBS (National Bureau of Statistics) 2008, Poverty prole for Nigeria, NBS Headquarters,
Abuja.
NBS (National Bureau of Statistics) 2009, Annual abstract of statistics, NBS Headquarters,
Abuja.
NBS (National Bureau of Statistics) 2013, Annual abstract of statistics, Abuja: NBS
Headquarters.
Nda-Isaiah, S 2013, Nigeria: What Happens in 10 Years When We Hit 250 Million and Oil Sells
for $15?, viewed 9 February 2014, http://tinyurl.com/otx4s5w.
NNPC (Nigerian National Petroleum Corporation) 2014, Development of Nigeria's oil
industry, viewed 30 October 2014, http://tinyurl.com/ogklhow.
Obaje, N 2009, Geology and mineral resources of Nigeria, Springer, London.
Obaje, NG, Attah, DO, Opeloye, SA & Moumouni, A 2006, Geochemical evaluation of the
hydrocarbon prospects of sedimentary basins in Northern Nigeria, Geochemical Journal,
vol. 40, no. 3, pp. 227-243.
Obaje, NG, Wehner, H, Scheeder, G, Abubakar, MB & Jauro, A 2004, Hydrocarbon
prospectivity of Nigeria's inland basins: From the viewpoint of organic geochemistry
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86 M. Chindo et al. The Nigerian Extractive Economy 87
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