Biology of Business

Nigeria

By Alex Denne

Nigeria is Africa's largest economy and most populous nation, but its federal structure distributes oil revenue through a formula that incentivises state creation rather than productive governance — the number of states has grown from 12 at independence to 36, each entitled to a share of centrally collected oil revenue regardless of its own economic output. Oil accounts for roughly 90% of export revenue and 50% of government income, creating a textbook resource curse where political competition centres on resource distribution rather than wealth creation. The Niger Delta, which produces the oil, receives a fraction of its value and has experienced decades of environmental degradation, militancy, and developmental neglect. Nigeria's governance challenge is the federal character principle — a constitutional requirement that appointments reflect regional and ethnic balance — which ensures representation but also institutionalises identity-based competition for state resources. The biological parallel is a parasitic relationship with the host ecosystem: resource extraction degrades the producing region while wealth concentrates in the administrative capital.

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Abuja
Headquarters

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