Understanding the effect of Dutch Disease On The Economy Of A Developing Country:The Nigerian Case

Nigeria is one of many developing economies affected by the "Dutch Disease"- a concept that diagnoses the case of a country so poor yet so rich even with abundant resources. Is it possible to have resource endowment and have a slow growing economy with little or no infrastructural development? In 2009, studies showed that there has been a steady decline in life expectancy and standard of living since the discovery of crude oil in Nigeria in 1956. This is a misnomer as the country has "earned more than US$300 billion from crude oil" (Okonjo-Iweala, 2012, p.4) but corruption, infant mortality, and poor infrastructure has become the bane of the economy impeding any of form of development. In this paper, the concept of Dutch disease as it affects Nigeria is considered with a view to understanding the major culprits in the country's case. It is also surmised that the chief culprit for a nation's poverty is not always the lack of abundant natural resources but lack of planning, preparedness , transparency , mismanagement of these resources and a high level of corruption. It has been concluded that Nigeria as a nation of talented and industrious people would have fared better economically and as a consequence politically, if crude oil had not been discovered and exploited. Some evidence is the gradual decline of GDP, the increase in unemployment rate and the continued increase in the country's poverty level. These should not be the indices of a resource-rich country.