Economic crossroads: The experiences of Nigeria and lessons from Malaysia

Abstract

Nigeria has the potential to become Sub-Saharan Africa’s largest economy and a major player in the global
economy by virtue of its human and natural resource endowment. These potentials have remained untapped,
and if current trends continue, Nigeria runs the risk of not meeting the internationally agreed millennium
development goals (MDGs) by 2015. This paper is an attempt to assess the economic performance in Nigeria
with a view of identifying what went wrong and drawing lessons from Malaysia for its vision 2020. The two
countries have the vision of becoming advanced economies by the year 2020. Nigeria’s economic landscape
especially since the oil boom of the mid 1970’s has become the textbook example of Africa’s economic
growth and tragedy with a gross domestic product (GDP) of about $43 billion in 2001, the economy has
shrunk to a third of its size in 1981, per capita income has shrunk from $1150 in 1991 to a barely $300 in 2001.
As at 2001, Nigeria had received appropriately $300 billion from oil exports since the mid 1970’s but per
capita income was 20% less than the 1975 level. The economic structures remain highly undiversified, with
oil accounting for than more 95% of exports and manufacturing sector accounting for less than one per cent
of exports. In 1999 the country returned to the path of civil democratic governance, economic growth has
risen substantially, with an annual average of 7.4% in the last decade. But the growth has not been inclusive,
broad-based and transformational. The implication of the trend is that economic growth in Nigeria has not
resulted in the desired structural changes that would make manufacturing the engine of growth, create
employment, promote technological development and induce poverty alleviation. The one lesson for Nigeria
is that for it to attend its Vision 2020 it must promote an all inclusive growth in all sectors.