Introduction
Nigeria's economy, traditionally based on agriculture and trade, changed profoundly under colonial rule, beginning in the late 19th century. The need to pay taxes to the colonial government forced Nigerian farmers to replace food-producing crops with cash-producing crops, which the government bought at low prices and re-sold at a profit. In the 1960s and 1970s the petroleum industry developed, prompting greatly increased export earnings and allowing massive investments in industry, agriculture, infrastructure, and social services.

In 1999 Nigeria's gross domestic product (GDP) was $35 billion. The GDP has varied widely, depending on the oil market: $81 billion in 1985, $33.2 billion in 1994, $40.5 billion in 1995. Although petroleum accounts for as much as 98 percent of export earnings and produces about four-fifths of government revenues, the production of the GDP is divided almost equally between the petroleum, agriculture, and service sectors.

Labor
In 1999 the labor force totalled 49.1 million, up from 30 million in 1980. Women made up 36 percent of the force, men 64 percent. An estimated 43 percent of all workers were in agriculture, down from 54 percent in 1980; 50 percent were in the service sector; and 7 percent were in industry, including mining, manufacturing, and construction. Most Nigerians earn their living in more than one field.

In 1985 Nigeria's central labor union, the Nigerian Labor Congress (NLC), founded in 1978, totalled 3.5 million workers belonging to 42 industrial and professional unions. In the mid-1990s the largest memberships belonged to the Nigerian Union of Teachers; the National Union of Banks, Insurance, and Financial Institutions Employees; and the Nigerian Textile, Garment, and Tailoring Workers Union. Among the most active unions are those representing petroleum workers and university teachers, which have challenged the government not just on salary and economic issues but also on abuses of human rights and autocratic rule.

Agriculture
Many Nigerians are rural farmers who live in small farming communities. Agriculture, including farming and herding, accounts for about two-fifths of Nigeria’s GDP and engages 43 percent of the economically active population. Agriculture contributed more than 75 percent of export earnings before 1970. By the mid-1990s, agriculture’s share of exports had declined to less than 5 percent, most of which was contributed by cacao. Nigeria’s major crops of the mid-1990s included palm oil (of which Nigeria was the world’s leading producer until 1971), peanut oil, rubber, and cotton, all of which were once exported but are now sold mostly locally. Also grown are sorghum, millet, maize (corn), yams, and cassava, all formerly used as food for growers but now widely sold for cash.

The great majority of Nigeria’s farm production comes from small holders who use hoes and similar basic tools. In less crowded areas, crops are typically planted in rotations that let soil lie fallow and recharge. In more crowded areas, for example near large Hausa cities and in the Igbo heartland, cropland is typically under constant cultivation. With the notable exception of Hausaland, women play a prominent role in farming in Nigeria.

In the last two decades the government has increased farm output through major irrigation projects, massive investments in rural infrastructure, and introduction of modern seed varieties and chemicals. In the mid-1980s, in an attempt to stop the import of food and raw materials that could be grown locally, the government encouraged large-scale, mechanized farming by local entrepreneurs and international corporations. Although large-scale, machine-based farming has increased substantially, it accounts for only a fraction of total production.

The livestock sector is dominated by Fulani pastoralists, who use mostly traditional forms of production. State and federal governments have tried periodically to encourage the Fulani to form large-scale cattle ranches, but with little success. In 1983 cattle rearing was devastated by a highly contagious virus known as rinderpest, but by the mid-1990s had mostly recovered. Modern poultry farming, geared to meeting urban demand for eggs and chicken, has increased substantially since 1980.

Services
Services are a vast part of the Nigerian economy that include most informal and many formal enterprises. In all, services account for about one-third of the GDP. In rural areas, the informal service sector is made of small-scale enterprises that rely on family labor. This sector includes traders, hairdressers, entertainers, porters, tailors, auto mechanics, and traditional healers. In larger cities, many of the same services are provided by formal-sector entrepreneurs, who often rely on non-family labor. Other businesses, including law offices, banks, and travel agencies, fall exclusively within the formal sector. Tourism in Nigeria is a small part of the service economy; in 1998 the country received 640,000 tourist visits.

Mining
During the early and mid-1990s mining contributed an average of about 25 percent of the GDP, depending on the price of petroleum. Discovered in 1956, petroleum was produced at a rate of 780 million barrels in 1999 from more than 150 oil fields, mostly in the Niger Delta. About one-fifth of the oil fields are offshore. Although Nigeria's petroleum is expensive to produce, it commands a high price because of its low sulfur content. Half of all exports go to the United States, most of the other half to Europe.

Nigeria has Africa's largest reserves of natural gas, most of which coincide with the oil fields. Despite efforts to develop markets for natural gas, including investment in gas-fired electrical installations, a liquefied natural gas (LNG) plant, and fertilizer and chemical ventures, almost three-quarters of production is still burnt off.

Production of coal has declined to about 63,503 metric tons, far less than the late 1950s production, largely because the Enugu coalfields are almost exhausted. The government is attempting to boost production by developing new fields at Lafia and Obi in Benue State. Also in sharp decline are production of tin (200 metric tons per year) and columbite, which have been mined from alluvial gravels on the Jos Plateau since 1905 but which now yield about 1 percent of their late 1960s levels. Other major mining operations include iron ore, which is exploited for the steel industry, and limestone, used to manufacture cement. Gypsum, barite, and kaolin mines have also been established recently.

Manufacturing
In 1998, manufacturing accounted for 5 percent of the GDP. Pre-independence Nigeria, its large population notwithstanding, had very little industrial development— a few tanneries and oil-crushing mills that processed raw materials for export. During the 1950s and 1960s a few factories, including the first textile mills and food processing plants, opened to serve Nigerians. During the 1970s and early 1980s industrial production increased rapidly, principally in Lagos, Kaduna, Kano, and Port Harcourt. Factories also appeared in smaller, peripheral cities such as Calabar, Bauchi, Katsina, Akure, and Jebba, due largely to government policies encouraging decentralization.

The largest industrial sectors, in number of establishments, are food and beverages; textiles and clothing; wood and wood products; fabricated metal products and machinery; paper products; and chemical, petroleum, coal, rubber, and plastic products. While many of the businesses in these sectors are large, others are small and labor-intensive, such as enterprises for weaving, leather-making, pottery making, and woodcarving. The smaller industries are often organized in craft guilds involving particular families, who pass skills from generation to generation.

In an attempt to broaden Nigeria’s industrial base, the government has invested heavily in joint ventures with private companies. The largest such project is the integrated steel complex at Ajaokuta, built at a cost of $4 billion. The government has also invested heavily in petroleum refining, petrochemicals, fertilizers, and implements for assembling automobiles and farm equipment. In the mid-1990s the government introduced a series of reforms, including an allowance for greater foreign ownership in Nigerian industries, a loosening of controls on foreign exchange, and the establishment of an export-processing zone at Calabar.

Forestry and Fishing
The bulk of Nigeria's forest production is fuelwood, consumed either as wood or as charcoal. In 1999 fuelwood production was 89 million cubic meters (3.1 billion cubic feet), harvested mostly near dense urban areas. By contrast, annual lumber production (mostly hardwoods such as mahogany, iroko, and obeche) averaged 2 million cubic meters (71 million cubic feet), almost all from the tropical forest zone.

Nigeria's 1997 fish catch was 383,400 metric tons live. Slightly less than half the catch was from inland waters, mainly Lake Chad, the Niger Delta, and Kainji Lake. Various species of catfishes, tilapias, and Nile perch, among others, are harvested using small-scale and traditional methods. Sardinellas, bonga shad, and shrimp are harvested from the Atlantic Ocean. In 1975 the government established the Nigerian National Fish Company to enter into joint fishing ventures with foreign companies. Most of Nigeria's 296 vessels larger than 100 gross registered tons are concentrated inshore; deep-sea fishing is still dominated by foreign boats.

Energy
Petroleum, natural gas, and hydroelectricity are Nigeria's major sources of commercial energy; they are slightly outpaced by the largely non-commercial consumption of fuelwood and charcoal. The major thermal electrical installations are at Igbin, Afam, and Sapele. Hydro-electricity is generated at Kainji Dam and in lesser quantities at Shiroro Gorge on the Kaduna River, at Jebba, and at several smaller sites. Only 5 percent of the country’s potential hydroelectric capacity has been developed.

Transportation
Nigeria has 194,394 km of roads. Most Nigerians travel by bus or taxi both between and within cities. During the 1970s and 1980s federal and state governments built and upgraded numerous expressways and trans-regional trunk roads. State governments also upgraded smaller roads, which helped open rural areas to development.

Nigeria has 3,505 km (2,178 mi) of operated railway track. The main line, completed in 1911, links Lagos to Kano, with extensions from Kano to Nguru, from Zaria to Kaura Namoda, and from Minna to Baro. The use of railways, both for passenger and freight traffic, has declined due to competition from the road network.

Nigeria’s largest ocean ports are at Lagos (Apapa and Tin Can Island), Port Harcourt, Calabar, Sapele, and Warri. The main petroleum-exporting facilities are at Bonny and Burutu. Transportation along inland waterways, especially the Niger and Benue rivers, was very important during the colonial era. In the late 1980s the government upgraded river ports at Onitsha, Ajaokuta, Lokoja, Baro, Jebba, and Yelwa. Locks have been constructed at Kainji Dam to facilitate navigation. River transport is used mainly for shipping goods.

Nigeria has two major international airports, one in the Lagos suburb of Ikeja and the other in Kano. Internal flights serve the majority of state capitals, of which Kaduna, Port Harcourt, and Enugu are the busiest. Nigeria Airways, the national carrier, offers both domestic and international flights. Several small regional carriers also compete for domestic traffic.

Communications
The first newspaper was founded in Lagos in the 1830s. In 1996 Nigeria had about two dozen daily newspapers in English, plus one each in Hausa and Yoruba. The largest are the Daily Times (Lagos), Nigerian Tribune (Ibadan), New Nigerian (Kaduna), and Nigerian Observer (Benin City). Despite sporadic censorship and partial government ownership of some newspapers, the press has remained relatively free and has often been outspoken in its criticism of the government.

The national government began broadcasting in 1957, when it established a chain of radio stations. As of the mid-1990s, there were more than 70 stations broadcasting in English and in several Nigerian languages. The country’s international service, Voice of Nigeria, broadcasts in several languages, while the government-owned Nigerian Television Authority operates from more than 20 television stations.

Trade
Nigeria depends on foreign trade to meet many of its needs, although in recent years it has achieved a healthy trade surplus. Petroleum accounts for virtually all exports; cacao, rubber, and shrimp together contribute about 2 percent. About 90 percent of Nigeria’s exports go to the United States and Europe (mostly Spain, Italy, Germany, The Netherlands, and France) in almost equal measure. Major imports, in order of importance, are base metal manufactures, including motor vehicles and industrial machinery; basic manufactures, including iron, steel, paper, and cement; chemicals and related products; and food and live animals. More than 60 percent of imports come from Europe (half of which come from Britain), and another nearly 20 percent come from the United States and Japan. China, Brazil, and India make up most of the rest. Only 5.2 percent of Nigerian exports and 0.8 percent of its imports are traded with other African countries.

Currency and Banking
The national currency of Nigeria is the naira, which is divided into 100 kobo (112.24 naira equal U.S.$1; 2002 average). Exchange rates have been allowed to fluctuate since 1995, when the government abandoned a short-lived attempt to fix the rate at 22 naira per dollar. Currency and banking are supervised by the Central Bank of Nigeria, founded in 1958 and located in Abuja. In 1995 more than 150 banks operated throughout Nigeria, although many were experiencing financial difficulty. Several foreign banks have branches in Nigeria; since 1976, all have been required to have at least 60 percent Nigerian ownership. The Nigerian Stock Exchange, founded in 1960, is located in Lagos and is supervised by the Nigerian Securities and Exchange Commission.