NATIONAL ACCOUNT OF NIGERIA

An Investigation into the National Account of Nigeria

Abstract

The purpose of this paper is to analyse the allocation of oil rents in Nigeria. The focus here is on the literature review and the concept related to the theoretical and Empirical Literature on natural resource rents, rent-seeking and natural resource curse (Dutch disease), and political economy of oil rents allocation and utilisation. Natural resources are significant determinants of economic development and Nigeria is one of the most natural resource rich countries. The oil is exported in large quantities, he extraction contacts are large that create a large amount of revenues; however unfortunately, the revenues are not allocated to the point that they contribute to economic development.

Table of Contents

CHAPTER ONE: INTRODUCTION4

An Overview4

Statement of the Problem4

Aims and Objectives of the Study5

Research Methodology5

Motivation of the Study6

Significance of the Study6

Research Questions6

Organization of the Study6

CHAPTER TWO: LITERATURE REVIEW8

Introduction8

Theoretical and Empirical Literature on Natural Resource Rents8

Rent-Seeking and Natural Resource Curse (Dutch Disease)11

Political Economy of Oil Rents Allocation and Utilisation14

Past Researches17

Conclusion17

REFERENCES18

CHAPTER ONE: INTRODUCTION

An Overview

The violent conflict between the oil companies and the local communities in Nigeria is not new. The ramifications of the oil issue in Nigeria and key consequences for the society relations are renowned. What is unknown is the prevalence of the rentier space, the operational mechanism, the origin and the continuation of the conflict. The federal government also faces the conflict in the Niger Delta, where a guerrilla spent years attacking the interests of the oil industry because of environmental degradation in the region and the distribution of oil revenues. According to National Planning Commission, 2007, most of the provision of the oil rent is to the economic development but due to the dictatorship of oil, a significant portion is invested into the following ways:

The government usually does not show the exact rent royalty.

There is oil conflict and accumulation politics in Nigeria

They under price the oil rent

The third parties receive black payments in the form of understated oil rent; however the original price is higher than the agreed one.

Statement of the Problem

Nigeria is one of the significant oil rich countries. However the oil rents have not been allocated to economic development. Like many other third world countries that are resource rich, the Nigerian leaders used the oil and mineral wealth royalty payments to ensure the loan security for their countries and to buy the military equipments and various other foreign goods. The accumulated debt was collected afterwards on the back of people which became a burden on the country gradually. Although the oil production in Nigeria is set to increase offshore of the Nigerian delta, people are concerned that the oil revenues will be lost in corruption and they will be left behind again with no share of the oil wealth. The interest free loan funds for sustainable development project can be established with the oil rents on the federal or state level mandated funs. The oil rents can also be used for the internal project if allocated ...