The Economy of Nigeria

The economy of Nigeria is characterized as an emerging market quickly advancing the middle income status. Its GDP in terms of purchasing power parity in 2007 is the 37th largest in the world due to its rich supplies of resources, modernized financial, communications, legal, and transport sectors while the Nigerian Stock Exchange is the second biggest in the African region. The United States is the country’s major foreign investor. The economic and financial centers of Nigeria are Lagos, Kaduna, Port Harcourt, and Abuja.

Nigeria is the 12th biggest producer of petroleum in the world, the 8th largest exporter, and has the 10th biggest proven reserves. Its petroleum products contribute almost 40% to its GDP. Some of the mineral resources that are still underdeveloped but pose huge potentials include coal, natural gas, gold, bauxite, tantalite, iron ore, tin, limestone, lead, zinc, and niobium. The telecommunications industry in the country is one of the fastest in the world, key players include MTN, Zain, Etisalat, and Globacom). At the Nigerian National Space Research and Development Agency in Abuja, Nigeria monitors its own space satellite. The country’s financial services sector also plays an important role in its economy. It consists of local and international banks, brokerage houses, asset management companies, private equity funds, investment banks, and insurance companies and brokers.

Nigeria joined the Organization of the Petroleum Exporting Countries (OPEC) in 1971 and the World Trade Organization (WTO) in 1995. In 2005, the country signed an agreement with the Paris Club eliminating Nigeria’s bilateral debt through combination of write-downs and buybacks worth approximately US$12 billion. Nigeria’s major trading partners include the US, Brazil, China, the UK, Spain, Netherlands, France, Germany, and Italy.