EXPORT DEVELOPMENT PROGRAMS OF NIGERIA?MDNM?
?FL? Major structural changes have affected the Nigerian economy during the past two decades. It changed from a predominantly agricultural economy to an oil export economy, and for a brief period oil revenues were used to finance economic development. The government accumulated enormous debts during the economic boom, and when oil prices declined Nigeria found itself with a huge trade deficit and a shortage of foreign exchange. Policies designed to control inflation artificially reduced the cost of foreign imports. Cheap imports flooded the country and choked off domestic agricultural and industrial production. Major economic reforms were initiated in 1986 which reduced imports and improved the prospects for export expansion, but the country still faces serious problems with foreign debt a lack of foreign exchange.
Traditionally, agriculture had been the foundation of the Nigerian economy. The country's petroleum reserves were an asset, but the value of crude oil was much less significant during the era of weak oil prices prior to 1973. When OPEC managed to increase oil prices four-fold in 1973, Nigerian oil became much more important in economic development plans. Suddenly, the country enjoyed a surge in oil export revenue, and the funds were used to finance the development of roads, ports, education, public housing, and state-owned industries which were capital intensive.?FN1"Economic Reforms Make Nigeria Attractive Again to U.S. Business," ?MDUL?Business America?MDNM? Vol. 19, No. 10. (September 14, 1987) p. 15.
? The economic boom was a new experience for Nigeria, and it led to ambitious development plans which could not be financed entirely by export revenues. Based on a belief that oil revenues would continue at present levels, many oil producing nations and international lenders fell into the same trap. Nigeria borrowed heavily to finance internal development, and...