Central Bank of Nigeria
According to the Economist, 'Oil multiplied Nigeria's exports by a factor of 10 in the 1970s, and its imports by a factor of 11. This fuelled Nigeria's honourable ambitions to emerge as the greatest power in Africa. The country's rulers are bitterly disappointed by the way the oil glut has partially devalued this great natural resource. So are some exporters to it. '1 In the wake of this unhappy state of affairs, Nigeria has taken steps to redress the situation. Some people, however, argue that the most effective action Nigeria should take is to lower the price of her oil and therefore sell more oil in order to maintain her revenues and thereby stem the tide of financial squeeze facing the country as a result of acute shortfall in crude petroleum exports. But Nigeria cannot unilaterally reduce the price of her oil as long as she is a member of OPEC. In order, therefore, to enable her to exercise this rational economic logic of lowering price and increasing her sales and receipts, the proponents argue that Nigeria should withdraw from OPEC. Many others, however, argue that Nigeria's interests are better served inside rather than outside OPEC. In this way, the 'Nigeria and OPEC: To Be Or Not To Be' controversy, is set. In order to resolve this controversy, some basic questions need be asked and answered. First, why did Nigeria join OPEC in the first instance? What has Nigeria benefited or lost from OPEC membership? What is the case for and against Nigeria's continued membership of OPEC? And, finally, what prospects has oil in Nigeria? The purpose of this lecture is to attempt answers to the above questions in the order in which they are put.
CBN Economic and Financial Review
Nwankwo, G. O. (1982). Nigeria and OPEC: to be or not to be. CBN Economic and Financial Review. 20(1), 6-13.