EFFECTS OF CRUDE OIL IN NIGERIA ECONOMY

                            EFFECTS OF CRUDE OIL IN NIGERIA ECONOMY
Oil exploration in Nigeria started in 1908, it was not until late 1958 that oil was first found in commercial quantities. The Oil industries started growing during the 1960s as the country started exporting oil overseas. During this period, the Nigeria government began to consider ways in which the resources being exported by the oil companies could be better  harnessed for the country's development. With the production of oil in commercial quantity, the Nigeria government introduced its first regulation governing the taxation of Oil industry's profit in 1959.

Oil is the major source of Nigeria economy, oil being the mainstay of its economy plays a vital role in shaping the economy. Although Nigeria's oil was founded at the beginning of the century, it was not until late 1967-1970 that the oil industry began to play a prominent role in the economy of the country. Nigeria is a country that is primarily rural, which depends on primary products, especially oil product.

Since the attainment of independence crude oil discovery has had certain impacts on the Nigeria economy, both positively and adversely. on the negative side, this can be consider with respect to the surrounding communities within which the oil wells are exploited, some of these communities still suffer environmental pollution,which leads to deprivation of means of  livelihood and other economic and social factors. Although large proceeds are obtained from the domestic sales and export of petroleum products, its effect on the growth of  the country's economy as regards to returns and productivity is still questionable. Hence, the need to evaluate the relative impacts of crude oil on the economy in light of the study is needed, the main objective is to access the impact of crude oil on the Nigeria economy.

Given the fact that oil is crucial in Nigeria economy, there is still need for an appropriate and desirable production and export policy for the sector. Though, oil has contributed largely to the economy, the revenue has not been properly used considering the fact that there are other sectors in the economy, the revenue from oil can be invested in them to diversify and increase the GDP of the economy.

The oil boom of the 1970s lead Nigeria to neglect it's strong agricultural and light manufacturing bases in favour of an unhealthy dependence on crude oil, The agricultural sector in Nigeria has fallen drastically since the discovery of crude oil, other sectors has also been neglected due to oil, In 2000 oil and gas exports accounted for more than 98% of export earnings and about 83% of federal government revenue. New oil wealth, the concurrent decline of other economy sectors has fuelled massive migration to the urban areas and lead to increase in the spread of poverty, especially in the rural areas, a collapse of basic infrastructure and social services since the early  1980s accompanied this trend. By 2000 Nigeria per capital income had plunged to about one-quarter of its mid 1970s high, below the level at independence.

The discovery of crude oil has redesign the Nigeria economy especially negatively. The maximum attention given to oil has lead to the drastic fall of most of its natural resources, which is affecting the country negatively and shaking its economy.