Nigeria's Major Exports
Study Nigeria's export base and the case for diversification.
Nigeria earns most of its foreign exchange from a small number of exports.
- Name Nigeria's main exports.
- Explain the risks of dependence on oil.
- Describe ways to diversify the economy.
Main Exports
- Crude oil and natural gas — the largest source of foreign exchange.
- Cocoa — mainly from the south-west.
- Sesame, cashew and groundnut — agricultural exports.
- Solid minerals — tin, limestone and small amounts of gold.
The Risk of Oil Dependence
When oil prices fall, government revenue and foreign reserves fall with them. A single-commodity economy is vulnerable to global price shocks.
Diversification
Diversification means widening the range of goods and services a country produces and exports. Agriculture, manufacturing, technology and tourism can create jobs and stabilise income.
Oil falls from $100 to $50 a barrel. Export earnings halve.
Government budgets tighten, imports become harder to pay for, and the naira may weaken.
Practice
- Name three of Nigeria's major exports.
- Explain two risks of depending mainly on oil.
- Suggest two industries Nigeria could develop to diversify.
Recap
Nigeria relies heavily on oil. Diversification into agriculture, manufacturing and services reduces vulnerability.
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National Income and Development
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