Do you know what are the major sectors of the Nigerian economy? See the structure of the Nigerian economy below.
Structure of the Nigerian economy
Let's try to emphasize the main sectors of the country's economy.
Sectors of Nigerian economy are divided into 3 types:
- Primary (agriculture, oil/gas, mining, forestry);
- Secondary (light and heavy industry);
- Tertiary (services).
Nigeria is the most populous country in Africa, which now can boost continent's largest economy (ahead of South Africa). So, have a look at the most important sectors of the Nigerian economy:
Oil extracting industry
Oil industry acts as a basis of Nigeria economy. Oil provides 90 percent of export earnings of the country. Nigeria is the first country in Africa and the eighth country in the world in terms of oil export. Nigeria's first oil was drilled in 1958. A large part of the oil reserves is concentrated in the Niger Delta. In order to increase revenues, Nigeria has continued to increase oil production, but in the 90s oil prices were quite low. Nigeria produced 2.1 million barrels of oil daily. The oil industry main player is Nigerian national oil company (75% of revenues from the sale of oil) and Royal Dutch Shell.
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Since 1970, oil became the basis of the raw material base of the mining industry in Nigeria. Oil deposits were discovered in offshore, near the Niger River delta and in Anambra River basin. Main oil production areas are located around Port Harcourt in the Niger Delta and in Ughelli. In 1979 Nigerians achieved a record level of oil extraction - 114 million tons.
Nowadays oil reserves are evaluated to be about 35 billion barrels.
Natural gas reserves of Nigeria are estimated to be about 100 trillion cubic feet, half of which are situated in oil and gas deposits. By 2010, the country became one of the leaders in the export of liquefied natural gas (LNG) — annual export volume amounted to 21.9 million tons.
As a part of the expansion of gas export, the West African gas pipeline to Ghana was laid. It should bring Nigerian natural gas to the market of West Africa. In addition, Nigerians plan to set up Trans-Saharan gas pipeline through the territory of Niger to Algeria in order to supply European market with gas.
Mining - tin ore and coal
Minerals provide a great part of the national income of Nigeria. The first mining products for export in Nigeria were tin ore and coal. Since 1904, mining of cassiterite and tin ore on Jos plateau has always been in hands of private companies, and coal mining in Enugu district under the control of Central government. After setting up tin-melting plant in 1962, a larger part of tin began to be exported in the form of bars. After 1960 in connection with the transfer of railways to diesel fuel and the emergence of cheaper and more environmentally friendly petroleum products, coal production fell into a decay.
Despite the fact that Nigeria is rich in oil, over 60% of citizens are employed in agriculture. In rural areas, the share of employment in the agricultural sector is over 90%.
The main food crops of the South and Middle belt of Nigeria:
In the Northern regions Nigerians cultivate:
In this part of the country, there is also livestock farming development.
Cassava, tomatoes, and beans are grown throughout the whole country. Onions are grown in the areas of meadows and pastures, for instance, near Kainji lake, using for this purpose irrigated land. Favorable climatic conditions in the Lagos area allow collecting two harvests. Coffee, tobacco and Kola nuts are grown for sale in the domestic market. Cotton, palm oil, peanuts, and rubber are produced for the domestic market and for export, and cocoa beans - for export only.
The agricultural sector accounts for about 24% of GDP. The potential of Nigerian agriculture is still far from exhausted.
Nigeria occupies one of the leading places in terms of availability of transport and density of road network. Air and sea transport connects Nigeria with many countries in the world. The main way of transport movement is by road, which provides approximately 95% of passenger traffic. The total length of roads – 193,2 km. In Kano, which is dominated by the Muslim population, public transportation has separate carriages for male and female passengers (for Christians there are vehicles of mixed type). The total length of railways is 3557 km.
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The country has a well-developed maritime transport system, which includes the complex of ports in the Niger Delta (Warri, Koko, and Sapele), ports in Calabar, Lagos and Port Harcourt. In Bonny and Burutu there are specialized ports for the shipment of oil. The commercial fleet comprises 303 ships, including 29 oil tankers and 4 tankers intended for the carriage of chemical products.
The energetic sector in Nigeria is underdeveloped, the demand for power significantly outstrips supply. Electricity is provided approximately to 40% of the population, and the rest use wood and petroleum products as fuel. Electricity is produced at thermal power plants in Egbin (Lagos state), Ogbia (Kogi state), Sapele (Delta state), which function with the help of oil, natural gas or coal, and hydropower plant (the largest Kainji on Niger river). In 2000, 64% of electricity was produced with the help of thermal power plants. In the Center of Research in the Energy field (in Zariya) Nigerians are working out the possible use of nuclear energy. Almost every business and many homes have private generators.
Speaking about providing services, Nigeria occupies the first place in the rating among all the African countries. In comparison with previous years, nowadays Nigeria sector of banking services is flourishing. Nigerian private sector begins to play more and more active role in the sphere of services.
So, hope that now you know a little bit more about the structure of the Nigerian economy and major sectors of the Nigerian economy.
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