Examining the Contributions of the Oil Sector to Nigeria’s Development: A Review Article

The economic history of Nigeria has been a history of transitioning from agriculture towards the extractive industry where crude oil exports alone accounted for more than half of the country’s foreign exchange earnings. Arising from increasing threats to the oil sector such as increasing demand for renewable energy sources and rising insecurity in the oil producing areas, there is the need to examine the importance of oil in Nigeria's development. The paper made use of extant literature and annual economic reports for its analysis. It reaffirms that the foundation of Nigeria’s economy was agriculture which involved the export of cash crops such as groundnuts, cotton, rubber and cocoa. However, the discovery of crude oil and commencement of its export began to tilt the economy towards a mono economy with over dependence on crude oil exports. development of the country has become solely vested in the oil sector. Emphasis here is laid on exploring the oil and gas sectors and the contributions to the general development of the country. It argues that the oil sector has contributed both positively and negatively to the development of Nigeria. The paper maintains that the oil sector remains fundamental catalyst for Nigeria’s economic development but it also makes the country vulnerable to the shocks of the global oil market and the politics associated with crude oil internationally. The decline of the country’s agricultural sector is also associated with the accelerated importance of oil hence, the paper recommends that concerted efforts be made toward diversifying the economy of the country.