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A Historical Perspective of Petroleum on Nigeria's Economic Crisis Since Global Journal of HUMAN-SOCIAL SCIENCE: E Economics Volume 15 Issue 2 Version 1.0 Year 2015 Type: Double Blind Peer Reviewed International Research Journal Publisher: Global Journals Inc. (USA) Online ISSN: 2249-460x & Print ISSN: 0975-587X A Historical Perspective of Petroleum on Nigeria’s Economic Crisis Since Independence By Paul, Ilesanmi Akanmidu Adekunle Ajasin University, Nigeria Abstract- The study examines the intricacies that are inherent in the Nigeria's economic crisis since independence. The paradoxical state of Nigeria’s economic as the giant of Africa attracts global attention. This study sheds light on the phases of economic development of the nation using historical methods. It surveys the place of agriculture in the Nigeria’s economy before the discovery of petroleum in the 1950s. It is the central argument of this study that the transmogrification of Nigeria’s economy from agric-based to petroleum-based that laid the foundation of the current economic crisis. The persistent flow of cheap petrodollars accruable from daily exploration of petroleum killed agriculture and led to massive rural-urban migration. Moreover, the problems of unemployment, corruption, wasteful and unrewarding execution of moribund projects by the government are products of petroleum economy in Nigeria. Keywords: nigeria, economy, agriculture, petroleum, unemployment, corruption. GJHSS-E Classification : FOR Code: 149999 AHistoricalPerspectiveofPetroleumonNigeriasEconomicCrisisSinceIndependence Strictly as per the compliance and regulations of: © 2015. Paul, Ilesanmi Akanmidu. This is a research/review paper, distributed under the terms of the Creative Commons Attribution-Noncommercial 3.0 Unported License http://creativecommons.org/licenses/by-nc/3.0/), permitting all non-commercial use, distribution, and reproduction in any medium, provided the original work is properly cited. A Historical Perspective of Petroleum on Nigeria’s Economic Crisis Since Independence Paul, Ilesanmi Akanmidu Abstract- The study examines the intricacies that are inherent Indonesia, Qatar, Bahrain, Kuwait, Abu Dhabi, Libya, in the Nigeria's economic crisis since independence. The Iraq, Iran, Norway, Egypt and Oman which are also paradoxical state of Nigeria’s economy as the giant of Africa blessed with the same resources are able to transform attracts global attention. This study sheds light on the phases from zero level to the level of international recognition of economic development of the nation using historical 2015 with petroleum? (Lewis, 2007: 10-14) An attempt to methods. It surveys the place of agriculture in the Nigeria’s situate the above has warranted a quest for pragmatic economy before the discovery of petroleum in the 1950s. It is ear the central argument of this study that the transmogrification of assessment of the economic situation of Nigeria before Y Nigeria’s economy from agric-based to petroleum-based that the discovery of petroleum. laid the foundation of the current economic crisis. The 17 persistent flow of cheap petrodollars accruable from daily II. Nigeria’s Economy Before the exploration of petroleum killed agriculture and led to massive Discovery of Crude oil rural-urban migration. Moreover, the problems of unemployment, corruption, wasteful and unrewarding Agriculture was the dominant source of execution of moribund projects by the government are Nigeria’s economy before the discovery of petroleum in products of petroleum economy in Nigeria. This study argues 1956. Agriculture thrives in favourable climatic that it is only the diversification of the economy embracing conditions. The climatic factor is significant, not only in various sectors such as agriculture, mining, and relation to its effect on the character of the vegetation, manufacturing that can rescue the nation from the current but it also plays a dominant role in the ways of life, economic doldrums. It is this strategy that has the potential of including the pattern of economic activities of the creating jobs for the teeming unemployed population of the youths as well as boosting the foreign exchange earnings of various people. As in other part of the tropics, rainfall is Nigeria. It also has the capacity of ameliorating the high the most important element of climate in so far as insecurity, insurgencies and insurrections, which are currently agriculture, the main occupation of Nigeria’s people. threatening the corporate existence of the nation. The rhythm of economic activity which is revealed in the ) Keywords: nigeria, economy, agriculture, petroleum, farming calendar of the various parts of the country is E ( unemployment, corruption. controlled by the incident and distribution of rainfall as Volume XV Issue II Version I well as the rainy season, which decreases from south to I. Introduction north. Mangrove region of the southern Nigeria with high igeria has witnessed cocoon of economic crisis rainfall per annum supports the growth of palm trees, since independence. It is a matter of rubber, coffee and cocoa etc. The savannah grassland N bewilderment to many people why Nigeria, to the north supports the planting of cereal and - despite of its enormous human and material resources, leguminous crops such as sorghum, millet, ground nuts continues to groan in economic crisis. To some as well as animal rearing mostly for hide and skin ( scholars, the matter is seen as a default while others Ekundare 1973:56-56; Ake 1985:102-106). Agriculture view it as design. Thus, it becomes a sine qua non to was the mainstay of Nigeria’s economy from the earliest historically investigate this matter by way of subjecting time up to 1950s. Indeed, Nigerians had an enviable the scenario into serious academic scrutiny in order to record of food sufficiency but the era did not last deduce or advance possible effects of Petroleum on beyond the 1960s when its economy began a descent Nigeria’s economy. This is done with stringent into an abysmal dependence on imports. analogical mechanism through comparative index of As part of the efforts to integrate Nigeria into economic apparatus using historical tool of analysis. global economy, cash crops were introduced to Nigeria Global Journal of Human Social Science The first question that bothers the minds in this context by the Europeans from South America and India is, why is Nigeria still remains in economic comatose (Oluwasanmi 1960: 34-36). Palm oil became an export despite huge petrol-dollars accruable from daily commodity in Nigeria as far back as 1558; and by 1830, exploration of the black gold since 1960s? Secondly, the Niger Delta, which now produces crude oil, had why are other nations of the world, like, Saudi Arabia, become the major source of palm oil which dominated Nigeria’s export list for more than 50 years (Olukoju Author: Department of History and International Studies Adekunle Ajasin University, Akungba-Akoko, Ondo State, Nigeria. 2009:105-125). Cotton joined the export list in 1856, e-mail: [email protected] while cocoa was introduced and became an export crop ©2015 Global Journals Inc. (US) A Historical Perspective of Petroleum on Nigeria’s Economic Crisis Since Independence in 1895 (Olukoju 2009:117). Together with rubber, In the first generation Nigerian tertiary groundnut, palm kernel and Bennie-seed in later years institutions, these principles were keenly practiced. formed the major valuable crops. These cash crops There were University Farms where foods were formed the main source of revenue, export and foreign produced for the growing population of Nigeria and raw exchange for the government (Udo 1967: 18). It is very materials for agro-allied industries. We can argue important to note that the economy generally recorded conveniently that Nigerians universities served its tremendous self-sustaining growth and expansion purpose as research centres. Internally generated before crude oil became the mainstay. Nigeria boasted revenues for execution of university’s projects without of its groundnut pyramids in the north and Cocoa in the necessarily depending overwhelmingly on the Federal west. Palm oil also existed in commercial quantity in the and State Governments abound. east. Revenue from agriculture was appropriately used to build landmark social and economic infrastructure, III. The Discovery of Oil in Nigeria providing basic services like education, health, water 2015 The search for Petroleum in Nigeria started in and electricity supply. This enhanced farm settlements 1908 at Araromi area of the present Ondo State by a ear and cottage industries to service agriculture, providing German Company known as Bitumen Corporation (Afe Y vast employment opportunities for the people. In respect 2008: 28-32). This made Araromi the first camp of oil of food, the nation was self-sufficient before the era of 18 exploration outfit in Nigeria. However, Nigerian Bitumen crude oil. Agriculture provided 95% of the food needed Corporation ceased exploration as a result of the to feed Nigerians, contributed 64.1% Gross Domestic outbreak of World War I, which broke out in 1914-1918. Product (GDP) and employed over 70% of Nigerian In 1937, the Shell ‘D’ Arcy, which later became Shell BP population before oil began to be exported (Oluwasanmi Petroleum Development Company of Nigeria Limited, 1960: 23-29). entered the oil exploration scene in Nigeria. However, Evidently, there was no jobless person in the outbreak of World War II forced the company to Nigeria during this period as everybody had job to do in suspend activities in Nigeria in 1941, but resumed the farms. Both the young and old people carried out activities again in 1946 (Afe 2008: 30). The first deep farm works. Even the government workers still engaged exploration well was drilled in 1951 at Ihuo, 16 in farm businesses. They went to their various farms on kilometres northeast of Owerri, to a depth of 11, 228 Saturdays and during holidays or when they were on feet, but no oil was found (Bamigbon:2009). Oil was leaf. This helped them to complement as well as later discovered at Akata well, which was drilled in 1953 increasing their per capital incomes.
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