Background of the Study
In the beginning Nigeria largely operated an agriculture-driven economy. It cultivated major cash crops such as cocoa, groundnuts, palm oil, cotton, rubber and cashew nuts for export. The regional governments thrived on these, as well as solid minerals, cattle rearing, fishing, and other forms of livestock production which also fetched incomes.Though crude oil had newly been discovered in commercial quantity it wasn’t a major revenue earner for the government. Suddenly, it became a major source of income and indeed a game changer. It accounted for more than 80 per cent of the nation’s budget revenues and over 90 per cent of its foreign exchange earnings (Isangediok, 2016).
With the windfall, the government altered its initial policies that had been agriculture driven, and with enormous resources at its disposal, it indulged its fancies which were the importation of anything and everything. It abandoned the hitherto mainstay of the economy, became import-dependent, encouraged consumption patterns that altered contempt for local products and a strong desire for white collar jobs. That sounded the death knell on agriculture.
Clearly, before the Nigerian civil war, crude oil was not a dominant commodity. The economy did not suffer from the Dutch Disease- the crowding out of the traditional export sector by a new booming export sector and the non-tradable goods sector.
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