Economy Overview

Nigeria has a dual economy with a modern segment dependent on oil earnings, overlaid by a traditional agricultural and trading economy. At independence in 1960, agriculture accounted for well over half of GDP, and was the main source of export earnings and public revenue. The oil sector, which emerged in the 1960's and was firmly established during the 1970's, is now of overwhelming importance to the point of over-dependence: it provides 20% of GDP, 95% of foreign exchange earnings, and about 65% of budgetary revenues. Economic growth since the early 1970's has been driven primarily by the fluctuations of the global oil market.

Fundamental economic reforms were introduced by the Administration of the president which resulted in a stable macro-economic environment, including debt relief. A major debt deal led to massive reduction in Nigeria's debt from over US$36 billion in 2004 to a mere US$3.6 billion in 2008. The President has intensified economic reforms on the basis of the foundation laid by his predecessor. Between 2004-2008, the country's GDP grew two-fold to $209.5 billion and at an impressive rate of 7%. This was the best performance for many years, above the regional average of 6%.

The country's GDP recorded an average growth rate of 6.3% between 2006 and 2008. This was largely fuelled by the growth of the non-oil sector, including the phenomenal increase in the price of crude oil before the sharp decline of 2008, made worse by the global economic meltdown. According to the governor of the Central Bank of Nigeria, inflation declined steadily from 15.1% at the end of 2008 to 11.1% at the end of July 2009.

Notably one of the effects of the economic reforms, Economic and Commercial activities between Nigeria and China have greatly improved. By the end of 2012, trade volume was over USD 7.8billion, making Nigeria, China's second largest trading partner in Africa. Chinese investments also amounted to US$ 8billion during the same period, cutting across Agriculture, Oil and Gas, Solid Minerals as well as manufacturing of the Agro-Allied products. Nigeria and China have signed agreements on Trade, Economic and Technical, Scientific, Technological co-operation and Investment Protection.

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