Discuss The Factors That Impact The Level Of Growth And Development In A Country

One factor that can impact the level of growth and development in a country is the availability and easabillity to access natural resources. Nigeria is lucky enough to have vast amounts of oil that is easily accessible to them. As a result Nigeria exported about 2.08 million barrels of oil in 2019, of which India was their largest importer. Petroleum exports revenue represents around 86% of total exports revenue.Nigeria has utilised their oil reserves to become one of the fastest developing countries and placed them in the MINTs (Mexico, Indonesia, Nigeria, Turkey) which refers to a group of countries with the potential to realize rapid economic growth. The revenue the government is able to collect from the oil exports can be directly invested into the country to better their transport and infrastructure networks. This may attract FDI and allow for foreign companies moving production to Nigeria (Daewoo,Volkswagen). Furthermore, this creates jobs, which increases tax revenue for the government to spend on social welfare and improving education in vocational skills. The availability of oil has allowed Nigeria to develop faster than many countries.

However, Nigeria may succumb to primary product dependency. Nigeria s reliance on oil leads to a less diverse employment structure with most employment in the primary sector. This leads to an unbalanced economy that will struggle once the oil reserves run out, therefore the exploitation of oil is not sustainable and may not lead to economic growth and development in the long run. Furthermore, primary products are often income inelastic, therefore as world incomes rise, the country s terms of trade will fall, because the price of manufactured goods will rise proportionally in the long run. This is the Prebisch-Singer hypothesis. The revenue made from the oil may not be spread evenly leading to greater income inequality, greatening the Gini coefficient The lack of long term planning by the government may result in the collapse of the Nigerian economy once the oil runs out. As a result the availability and easabillity to access natural resources may not best influence the level of growth and development in a country.