Oil was discovered in Nigeria in 1956 at Oloibiri in the Niger-Delta by Shell-BP, which was at that time the sole concessionaire. Nigeria joined the ranks of oil producers in 1958 when its first oil field came on stream producing 5,100 bpd. After 1960, exploration rights in onshore and offshore areas adjoining the Niger Delta were extended to other foreign companies. In 1965 the EA field was discovered by Shell in shallow water southeast of Warri.
However, several recent studies have shown that oil and gas wealth is a paradoxical development ‘curse’ for many developing countries. Development problems such as poverty and inequality, low economic growth, conflict and high possibility of authoritarian rule has been associated with oil and gas dependent countries. In Nigeria, it is obvious that the benefits of the oil and gas wealth is been enjoyed by a few wealthy people, leaving those in the rural areas (including the areas where the where the oil is being extracted), very impoverished.
Prior to the discovery and commercialization of oil in Nigeria, the country was mainly wealthy through agricultural produce from each region of the country; the North was known mainly for groundnut and cotton, the south was known for cocoa and palm oil. The country was also producing other mineral resources such as tin and iron ore. But once oil was discovered, all attention shifted and people abandoned their farms for oil fields. Now agriculture has been left to mainly those in the rural areas and a few in the urban areas.
Given existing levels of poverty and the relatively low level of human development, it is vital that the non-oil economy and particularly the
agricultural sector be developed as a matter of urgency. Strategies to develop the non-oil economy should focus on specific areas: improving agricultural productivity; diversifying cultivation; facilitating rural markets; developing agricultural processing; enabling marketing for crops with export potential; facilitating the growth of the non-agricultural economy, with the government and donors addressing current constraints and supporting appropriate and sustainable investments in specific areas.
The rural development constraints that needs to be addressed includes repair and good maintenance of road for easy and faster movement of goods and persons, provision of good water within easy reach of every Nigerian, access to more sanitation facilities. Most importantly, there is a need to improve the power supply in the country, this will encourage more investors, even from other countries. At present, the use of generators is adding more to the costs of entrepreneurs and this is a discouragement to potential investors.
One very important step that needs to be taken is that more investment needs to go into agriculture through the government and other stakeholders. In the area of education, the rural farmers need to be taught ways to improve their farming and also they should be provided with financial means of achieving this.
If these steps can be taken, Nigeria’s economy will improve and it will easier to achieve the Millennium Development Goals.