8 - Documents : Report of The ODAMA Committee on the State of the Nigerian Economy

Abstract

The planned capital expenditure under the Second National Deve- lopment Plan: 1970/71 - 1973/74 was 3 billion compared with a total capital expenditure of 30 billion for the Third National Development Plan: 1975/76 - 1979/80, and 82.5 billion for the Fourth National Development Plan: 1981/85. These tremendous increases in planned ex- penditure were made possible by the increase in the price of crude oil which nearly tripled between 1973 and 1974, and jumped from 9 11.7 per barrel in 1974 to 9 40 per barrel in 1980. Together with increased production which had reached 2.05 million barrels per day by 1980, these increases in posted price for crude oil propelled Nigerian into the oil eco- nomy. From then on, the levels of oil production and export dictated the state of Nigeria's economy.

2. This would have had salutary effects but for basic structural pro- blems. While capital expenditure increased as infrastructural and other facilities were expanded and while the importation of machinery and equip- ment also increased, signifying expansion of industrial activities, the much hoped for economic take-off was not realised. Consequently, when in 1981/82 the demand for Nigerian oil in the world market fell drastically, the consequent destabilizing and devastating effects were felt throughout the sectors of the Nigerian economy, driving home vividly the dangers of relying heavily on a single resource base-oil. Below we briefly trace some significant developments related to our current economic problems.