Nigeria's Oil Reserves and Their Implications

This set of flashcards covers key vocabulary and concepts related to Nigeria's oil reserves and the broader implications of resource wealth.

Resource Curse

A phenomenon where countries rich in natural resources, like oil, experience less economic growth and worse development outcomes than countries with fewer natural resources.

Environmental Degradation

The deterioration of the natural environment through depletion of resources such as air, water, and soil; this can occur due to oil extraction and spills.

Economic Dependency

When an economy relies primarily on a single resource (like oil), making it vulnerable to global price fluctuations and economic instability.

Corruption

Dishonest or fraudulent conduct by those in power, typically involving bribery; common in nations with vast natural resources.

Conflict Resources

Natural resources that are linked to armed conflict and violence, often found in politically unstable regions.

Sustainability

Meeting the needs of the present without compromising the ability of future generations to meet their own needs, often discussed in the context of resource management.

Oil Revenue Management

The ways in which governments manage and distribute income generated from oil resources, which can affect economic stability and development.

Community Displacement

The forced removal of communities from their lands due to extractive industries, leading to social and economic dislocation.

Social Inequality

The unequal distribution of resources and opportunities among different social groups, often exacerbated in oil-rich regions.

Government Accountability

The responsibility of government officials to be answerable for their actions, particularly regarding how natural resource revenues are used.

1) What is the “resource curse” or “paradox of plenty” ?

The resource curse, or paradox of plenty, refers to the phenomenon where countries rich in natural resources often experience less economic growth, poorer development outcomes, and more authoritarian regimes compared to countries with fewer resources. This can lead to corruption, conflict, and social inequalities.

2) What does dependency on natural resource exports lead to according to the article on Nigeria?

It leads to economic vulnerabilities, corruption, and a lack of diversification in the economy.

3) What is corruption and how is it related to the resource curse? How do nations that escape the resource curse fight corruption?

Corruption is the abuse of power for personal gain, which can be exacerbated by the resource curse as government officials may exploit resource wealth. Nations that escape the resource curse typically implement strong governance, promote transparency, and diversify their economies.

4) What happened in Dutch disease? How does it impact non-resource sectors?

Dutch disease is an economic phenomenon that occurs when a country's currency appreciates due to increased revenues from natural resource exports, making other sectors, like manufacturing and agriculture, less competitive. This can lead to a decline in these non-resource sectors and overall economic imbalances.