Customized development plan for less developed countries in global competition

Nigeria faces a number of obstacles to becoming a modernized state. The country is currently ranked 32nd in the world in GDP, but 182nd in GDP per capita (CIA World Factbook, 2011). These figures are inflated by oil revenues that most of the country's people never see, as 70% of the population lives below the poverty line and the country ranks 147th in gross fixed investment and 183rd in education expenditure as a percentage of GDP. The country has major issues in AIDS, corruption, political instability, socio-religious conflict and a lack of economic diversification. There is hope for Nigeria, however, as many Nigerians work and become educated overseas, bringing back money and ideas to the country, in addition to Western standards of ethics and governance. This may help Nigeria overcome some of its issues, but the socio-religious schism may ultimately prove the most challenging.

Nigeria is an artificial country, carved out of Africa by the British, its boundaries not reflecting the Nigeria -- Africa's most populous country, has over 250 ethnic groups. Four groups in particular dominate, the Hausa, Fulani, Yoruba and Igbo (CIA World Factbook, 2011). The Ijaw and Itsekeri are also prominent as they live in the oil-rich areas of the country (Ngwane, 2010). In addition to tribal issues, the country is also divided between the Muslim north and the Christian south, with 50% of the population being the former and 40% being the latter. It has been estimated that ethno-religious conflicts in Nigeria since independence have resulted in three million deaths and "unquantifiable psychological and material damages" (Salawu, 2010). There are dozens of ethnic militias and the mutual distrust between the different ethno-religious groups has created tremendous social and political instability in the country. Instability increases risk and this discourages investment in the country.

Political instability is a major obstacle to Nigeria's development. Assassinations and coups have characterized Nigeria's governance since independence, creating difficult conditions for building economic prosperity. Major crises 1962, 1967 and 1993 each served to undermine governance in the country. As a result of this instability, the nation has been poor to address other issues such as corruption, poor allocation of revenues, the lack of bargaining power with Western multinational oil firms, who presently take the lion's share of the profits out of the country and other major issues of governance (Alabi, 2010). Thus, not only is Nigeria subject to a high level of political risk that discourages investment, the political instability has undermined any effort to imbue the country with the infrastructure needed to improve the economy in the long run. The country is dependent on foreign aid for development money, and its political system has a corrupt, inefficient bureaucracy that struggles to deliver anything meaningful on the domestic or international stage (Ibid).

Lastly, Nigeria has a weak economy owing to dependence on oil. Oil accounts for 80% of budgetary revenues and 95% of foreign exchange earnings (CIA World Factbook, 2011). This dependence has not only fuelled corruption but has also encouraged the Nigerian government to essentially ignore economic development initiatives. There are no mechanisms for scientific or technological innovation; most Nigerians seeking higher education go abroad with many not returning; an undue focus on cash crops that lead the country to import foodstuffs; and a vulnerability of income on commodity price fluctuations (Alabi, 2010). Nigeria's lack of economic diversification also leaves entire ethnic groups and regions of the country without any significant source of wealth. This in turns leads to resource-based conflict and increased instability (Ibid).

Nigeria's problems are complex and deep-rooted. It remains to be seen whether or not Nigeria can function as a nation with two major religious groups. If not, the first step would be to split it. Assuming that it can, the company's future lies in economic diversification and a return to agricultural self-sufficiency. There are two major antecedents to economic diversification. The first is that the nation's infrastructure and skill base must be improved. Education investments need to be increased significantly. In addition, transportation infrastructure and economic opportunity must extend to all of the country's ethnic groups rather than a few. People must also be encouraged to return to food production, away from cash crops. This will reduce instability even if it reduces wealth in the short-run. The enhanced stability will lead to economic growth in the long-run.

The second step is to eliminate corruption. Corruption drains the country's capital to the hands of the few where it should be dispersed among many. In addition, corruption adds to political instability and risk that discourages foreign investment. Eliminating the culture of corruption will encourage more investment in the country. At present, only the oil industry is lucrative enough to justify dealing with the corruption and instability. By reducing these factors, foreign investment in more industries will be encouraged, particular from Nigerians who have been educated and trained abroad.