Macroeconomy 
  • The economy has enjoyed sustained economic growth for a decade, with annual real GDP increasing by around 7%; it was 6.3% in 2014. The non-oil sector has been the main driver of growth, with services contributing about 57%, while manufacturing and agriculture, respectively contributed about 9% and 21%. The economy is thus diversifying and is becoming more services-oriented, in particular through retail and wholesale trade, real estate, information and communication.
  • The 2015 outlook is for moderate growth of 5%, due to vulnerability to slow global economic recovery, oil-price volatility and global financial developments[1]. The low oil price will lead to a sharp decline in fiscal revenues. However, the overall impact on non-oil sector GDP will be relatively muted. The sector is, thus, expected to remain the main driver of growth over the medium term and, in the light of the recent macroeconomic challenges, the government has adopted an adjustment strategy that hinges on tightening government spending and shoring up non-oil revenues to compensate for dwindling oil revenues.
  • Nigeria is the largest oil producer in Africa and is among the world's top five exporters of LNG. Despite the relatively large volumes of oil it produces, Nigeria's oil production is hampered by instability and supply disruptions, while the natural gas sector is restricted by the lack of infrastructure to monetize natural gas that is currently flared (burned off). Nigeria is the largest oil producer in Africa, holds the largest natural gas reserves on the continent, and is among the world's top five exporters of liquefied natural gas (LNG)[2]. Nigeria became a member of the Organization of the Petroleum Exporting Countries (OPEC) in 1971, more than a decade after oil production began in the oil-rich Bayelsa State in the 1950s. Although Nigeria is the leading oil producer in Africa, production suffers from supply disruptions, which have resulted in unplanned outages as high as 500,000 barrels per day (bbl/d).
  • Nigeria has the second largest amount of proven crude oil reserves in Africa, but reserve estimates have been stagnant as exploration activity has been low. Rising security problems coupled with regulatory uncertainty have contributed to decreased exploration activity. According to the Oil & Gas Journal (OGJ), Nigeria has an estimated 37 billion barrels of proved crude oil reserves as of January 2015—the second-largest amount in Africa after Libya[3]. The majority of reserves are found along the country's Niger River Delta and offshore in the Bight of Benin, the Gulf of Guinea, and the Bight of Bonny. Current exploration activities are mostly focused in the deep and ultra-deep offshore. NNPC had undertaken onshore exploration activities in northeast Nigeria, within the Chad basin, but the lack of discoveries and the presence of the militant group Boko Haram put exploration at a standstill. Exploration activities in the onshore Niger Delta have decreased because of the rising security problems related to oil theft and pipeline sabotage. Several major IOCs have divested from their onshore assets, which has created opportunity for local Nigerian companies to step in. The investment uncertainties surrounding the long-delayed PIB have also contributed to delayed investment in deepwater projects, and the start dates for these projects have continuously been pushed back.
  • Production and consumption Crude oil production in Nigeria reached its peak of 2.44 million bbl/d in 2005, but it began to decline significantly as violence from militant groups surged, forcing many companies to withdraw staff and shut in production. Oil production recovered somewhat after 2009 but still remains lower than its peak level because of ongoing supply disruptions. Nigeria produces mostly light, sweet (low sulfur) crude oil of which the vast majority is exported to global markets. Crude oil production in Nigeria reached its peak of 2.44 million bbl/d in 2005, but began to decline significantly as violence from militant groups surged, forcing many companies to withdraw staff and shut in production. The lack of transparency of oil revenues, tensions over revenue distribution, environmental damages from oil spills, and local ethnic and religious tensions created a fragile situation in the oil-rich Niger Delta. By 2009, crude oil production plummeted by more than 25% to average 1.8 million bbl/d.

[1] African economic outlook: country profile: Nigeria
[2] US Energy information administration
[3] US Energy information administration 
PRODUCTS 
        EXPORTED 
               FROM
                      NIGERIA
PRODUCTS 
        IMPORTED 
               TO
                      NIGERIA
DESTINATION 
        OF 
               EXPORTATIONS
                     
Economic Complexity
The economy of Nigeria has an Economic Complexity Index (ECI) of -1.048 making it the 125th most complex country. Nigeria exports 40 products with revealed comparative advantage (meaning that its share of global exports is larger than what would be expected from the size of its export economy and from the size of a product’s global market).
Geopolitical Outlines 
  • Politically speaking, the Peoples Democratic Party has governed over Nigeria since the democratic transition in 1999. Unlike many other cases we see in Africa, Nigeria has steadily maintained a balance of competing interests. No single interest group has been able to monopolize power. Political power has been distributed among the different regions of the country, enabling the political and economic inclusion that has prevented the violent grabs for power that characterized Nigeria during its military junta years. We have seen several of Nigeria's major regions achieve a relatively fair access to the tools of power in Abuja.
  • Indeed, the broadening of political power has enabled access to, and the leveraging of, economic resources in such a way to promote greater economic growth that underpins political stability. It is important to underscore this virtuous cycle. For regions of Nigeria – such as the Niger Delta – that in the past were deeply neglected or usurped of their resources, they have acquired a meaningful stake over their economy. The growth of Lagos as a commercial hub, not only for Nigeria but much of the West African region, is a noteworthy achievement in the ongoing story of Africa's development. But the country now faces new geopolitical threats from extremist groups.
  • The April 2014 kidnapping of the schoolgirls at Chibok, north-eastern Nigeria, has meant that Boko Haram is now widely discussed by Western governments and in Western media. Yet within Nigeria the group has been well known for several years. Boko Haram's activities, or actions attributed to the group, have developed in a range of ways, many contradictory, including bombings, kidnappings of Europeans within Nigeria and neighbouring Cameroon, killing of medical personnel, and overtures for dialogue with the Federal Government. There are recurrent reports of links to Al Qaeda in the Islamic Maghreb, and in the past few years the United States has taken a much more active role in the region. Some of the wider geopolitical issues relate to the French-led intervention in Mali; a country to which Nigeria has also sent troops.
​SOURCES: NATE HAKEN, FUND FOR PEACE AND PARTNERS FOR PEACE; NIGERIA WATCH; MICHAEL WATTS, UNIVERSITY OF CALIFORNIA, BERKELEY