Oil production and economic challenges in Nigeria

Developing Countries Production

Oil in Nigeria

Nigeria is located in West Africa and its borders are shared in the west by Republic of Benin, in the east Chad and Cameroon and in the North Chad. There are over 500 ethnic groups in the country but the three largest are Yoruba, Igbo and Hausa. In Africa Nigeria has the highest population and in the world it is ranked seventh most populous country. Nigeria falls under the Next Eleven economies. The country is a member of African Union and Commonwealth of Nations. The economy in Nigeria is classified under mixed economy and it has already reached a middle income status from World Bank statistics. The country has abundant natural resources among this is oil.

The greatest revenues in the country are brought by oil reserves. Petroleum is a great player in the economy of Nigeria and it accounts for up to 40% of the country's GDP and 80% of earnings to the government. .In sub-Saharan Africa Nigeria is the largest trading partner to United States when it comes to oil.it supplies close to one fifth of its oil which is approximately 11% of the oil imports. Nigeria is ranked as the 12th largest petroleum producer in the world and it is the 8th largest exporter. The main oil producing region in the country is Niger Delta.

Government structure in Nigeria

Nigeria is also known as the Federal republic of Nigeria.it is a federal republic that is made up of 36 states.it has its federal capital territory at Abuja. The president of Nigeria exercises the executive powers. The powers of the president are checked by the House of Representatives and the senate which together are combined in a bicameral body that is known as National Assembly.

There are various constraints which hinder marketing of products in Nigeria. First of all there is low marketing education within the country. Within the population the educated are consumers and investors. Most of the people regardless of their education they still practice unethical marketing practices such as smuggling. Another reason that hinders marketing in Nigeria is the fact that people prefer foreign products. Since Nigeria is just like other developing African countries, it is unable to produce some goods. Therefore they end up buying these products from industrialized countries. Therefore the local industries in Nigeria become impoverished. Therefore it becomes very difficult to market products that are produced locally in Nigeria since most of the people will prefer imports.

Education level of the population in Nigeria

Despite the high population there is a considerable level of education in the Nigerian population. However there is still a delayed entry into the education system in Nigeria. With this there is a lot of labor force that is available for the industries within the country. This comprises of the skilled labor force. Within the population there are those who do not go to school and they end up providing unskilled labor. The increasing levels of education in Nigeria moves the country into a different level of the economy. This is because with education, it means that there is growing intellect within the population and thus this people will bring a positive change in the economy.

Monetary system and global debt structure in Nigeria

The currency in Nigeria is known as naira. The naira is in form of coins and bank notes which are acceptable all over Nigeria. The Central Bank of Nigeria is mandated to be the sole issuer of money throughout the entire Federation of Nigeria. The CBN is responsible for controlling the volume of money that is supplied within the economy so as to make sure that there is price and monetary stability. When it comes to the global lending structure there are unfair lending practices that are being practiced by most of the international agencies such as the IMF and World Bank. Within Nigeria there are also some very strict regulations when it comes to lending from banks and other financial institutions. I would propose a system whereby there is the ease of accessing money from financial institutions and banks. The system should also include very fair repayment terms .this will enable many people to be able to borrow money from the institutions and thus be able to invest in Nigeria.

Nigeria import market

Nigeria is party of the 49 countries within the sub-Saharan Africa that is part of the African Growth and Opportunity Act. Nigeria supplies AGOA with crude oil. There are various commodities that are imported into Nigeria these include medicine, food products, industrial products like textile and glass bottles and so on. However there are various import prohibitions which exist in Nigeria that are in place to protect domestic industries and at the same time reduce the dependency of imports by Nigeria. Some of these include import bans, custom fees and import duty (Treichel, Hoppe, & Cadot, 2013).

Export market to Nigeria

There are strong trade ties between the U.S. And Nigeria and this was made formal through the Trade Investment Framework Agreement (TIFA) in 2000. At the current time, Nigeria is ranked 23rd largest goods trade partner for the U.S.A. with a total of $38.6 billion goods trade between the two countries. Taking into account the U.S.A. export trend to Nigeria, the U.S. ranks 44th largest exporter of goods into Nigeria at least by 2011. This was pegged at a figure of $4.8 billion which was an increment from the previous $747 million in 2010. Among the goods that the U.S.A. exports to Nigeria are cereals, vehicles, machinery, mineral fuel and plastic being the major exports with wheat bein the leading at $1.2 billion (Office of the United States Trade Representative (USTR), (2012).