From oil shortage to oil glut: Simulation of growth prospects in the Nigerian economy

During the 1970s, the economy of Nigeria provided one of the most interesting cases of development financed through oil revenue. Between 1970 and 1980, the country's GNP grew at an outstanding rate—after the transition from oil shortage to oil glut, the economy of Nigeria ran into dramatic financial difficulties, which are now placing major constraints to its development. To investigate the transition from an oil-based economy to a stage characterized by greater diversification of exports and more balanced sectoral growth, a model has been built by the University of Ibadan in Nigeria. The model was developed in association with Project LINK staffing for the future inclusion in the Project. According to the finding presented in the study, the annual growth rate of GDP of Nigeria between 1980 and 1988 will be around 2.5 percent. To compensate the drop of the foreign exchange earnings caused by the contraction of oil prices and demand, a vigorous export drive of agricultural products is simulated.