Economic Geography of Nigeria

What you need to know

• Agriculture employs roughly a third of Nigeria's labour force and contributes about a quarter of gross domestic product, yet it is dominated by smallholders farming under two hectares with hand tools and rain-fed methods, which is why output per hectare stays low.
• The main food crops by zone are yam, cassava, maize, rice, cocoyam and plantain in the south and middle belt, with Benue known as the food basket of the nation, and sorghum or guinea corn, millet, cowpea, maize and rice in the north. Nigeria is the world's largest producer of cassava, yam and cowpea.
• The main cash crops are cocoa in Ondo, Osun, Oyo, Ekiti, Ogun and Cross River; oil palm in Delta, Edo, Imo, Abia, Akwa Ibom and Cross River; rubber in Edo and Delta; groundnut in Kano, Jigawa, Kaduna and Katsina; cotton in Zamfara, Katsina and Kano; and sesame or benniseed in Benue, Nasarawa and Jigawa.
• Livestock is concentrated in the north, where lower rainfall limits the tsetse fly. Cattle, sheep and goats are kept largely under nomadic and transhumant Fulani systems, and are moved south in the dry season in search of pasture and water, which is the root of many farmer and herder conflicts.
• Fishing is both artisanal and inshore: marine fishing along the Atlantic coast, creek and lagoon fishing in the Delta, inland fishing on Lake Chad, the Kainji and Jebba lakes and the Niger and Benue, and a growing fish farming industry in catfish and tilapia ponds.
• Petroleum dominates the external economy. Crude oil and gas supply roughly 90 per cent of Nigeria's foreign exchange earnings and about half of government revenue, although the sector makes up under one tenth of GDP because it employs very few people. Nigeria joined OPEC in 1971.
• Refining capacity has long lagged behind demand. The state refineries at Port Harcourt, Warri and Kaduna have run far below nameplate capacity for years, forcing heavy importation of refined products, while the private Dangote refinery at Lekki has begun to change the balance.
• Gas is Nigeria's largest hydrocarbon reserve. It feeds the Nigeria LNG plant at Bonny Island for export, the thermal power stations at Egbin, Afam, Sapele and Delta, and the Escravos gas-to-liquids project, but a large volume is still flared.
• Solid mineral mining remains a minor contributor despite wide deposits, held back by poor geological data, weak funding, illegal artisanal operations and inadequate processing, so Nigeria exports raw ore and imports finished metal.
• Manufacturing clusters where power, labour, market and port access coincide: Lagos at Ikeja, Apapa, Ilupeju and Agbara; Kano and Kaduna for textiles, tanning and food; Port Harcourt and Warri for petrochemicals; Aba and Nnewi for footwear, garments and automobile parts; and Onitsha for plastics and trading.
• Nigerian industry is held back by unreliable electricity that forces firms onto diesel generators, poor roads, high interest rates, multiple taxation, insecurity, dependence on imported raw materials and machinery, and competition from cheap imports. Remedies include stable power supply, industrial parks, backward integration into local raw materials and protection of infant industries.
• Road transport carries the overwhelming majority of Nigeria's passengers and freight, roughly nine tenths, which is why roads wear out quickly. Rail is reviving with standard gauge lines from Abuja to Kaduna, Lagos to Ibadan and Warri to Itakpe, alongside the old 1,067 mm narrow gauge network.
• The main seaports are Apapa and Tin Can Island in Lagos, Onne and Rivers Port in Rivers, Calabar, Warri and Koko. The main airports are Murtala Muhammed in Lagos, Nnamdi Azikiwe in Abuja, Mallam Aminu Kano, Port Harcourt International and Akanu Ibiam in Enugu. Inland waterways on the Niger and Benue are seasonal and silted.
• Nigeria's exports are crude oil, liquefied natural gas, cocoa beans, sesame, cashew, rubber and urea fertiliser; the imports are machinery, vehicles, wheat, chemicals, electronics and refined products. Trade is channelled through ECOWAS and the African Continental Free Trade Area, and the heavy dependence on one export commodity leaves the balance of payments at the mercy of world oil prices.