The general outline of the financial system and market of the Nigerian economy comfortably be classified structurally into four major categories viz production, service, commerce and others. Production naturally is made up of agricultural which includes cropping, forestry, Hunting, fishing and livestock.
In the Nigerian Economy primarily, production also includes manufacturing, in essence craft and processing mining and quarrying. Construction and real estate services includes professional services, contributions to the economy such as lectures/ teachers, medical personal, lawyers, etc. as well public utilities, transport and communications. Commerce is made up of domestic trade, bills discounted, imports and export. Others includes credit and financial institutions, governments and miscellaneous.
Taking all the economic sector one by one we have the following in the Nigerian Economy;
Production – Agriculture mainly include rearing and rearing of animals, production of food for man and animal as well as provision of raw materials for industries. This sector equally provide employment opportunity for the teaming population and it is a regenerative source of foreign exchange earnings and source of government revenue, as seen the table showing the contribution of agriculture to GDP as at 1977 to 1978 factor cost.
Mining sub sector includes the conversation of raw materials into finished customer goods or intermediate or producer goods. This unit equally creates avenues for employment and helps to diversify the economy while contributing to the motions earnings of foreign exchange. It enables local labour to acquire skills and tend towards full utilization of available resources thus reducing the risk of over dependence on foreign goods.
Manufacturing sector in Nigeria has come a long way passing through four stages of developments.
Firstly stage I was the pre independent era, during this period manufacturing was mainly resource based with some elements of import substitution. Here manufacturing was limited to primary processing of raw materials for exports and production of simple. Consumer’s items by foreign multinational corporations.
Secondly stage II was the post colonial era of the 1960s which was characterized by the import substitution and decline for export oriented processing of raw materials initially means to reduce over dependence on foreign trade and save foreign exchange but turned to be a mere assemblage of those items rather than manufacturing them, thus negating the original aim since almost every items needed by the so called manufacturing industries were imported. This era equally witnessed alarming increase in the ownership of manufacturing facilities in Nigeria.
Thirdly the 1970s identifies as the decade remarkable for the advent of petroleum oil and the enormous resources it provided for the direct government investment in manufacturing thus making it fashionable for Nigerian government to almost exercise a complete monopoly in the following sub sectors, petroleum refining, liquefied natural gas, petrol chemicals, basic steel production, flat sheet plants, machine tools, pulp and paper, edible salt, yeast and alcohol, Nitrogenous and phosphatic fertilizer, it is equally on record that this era was characterised by poor results of government attempts to initiate indigenization programme and intense economic activity in that government’s attempts at the diversification of the economy from the traditional agric oriented products to non traditional products such as steel, petrochemicals, vehicles assemble, fertilizers etc yield little or success.
The fourth phase 1980s this decade marked government dwindling revenue because of the nose diving of petroleum oil prices at the world market thus necessitating many adhoc attempts at tinkering the economy which included among others the adoption of export promotion strategy on the realization of the pitfalls on the import substitution, the structural adjustment programme (SAP) beginning from July 1986 due to lopsided development in the entire manufacturing sector SAP strategy was adopted as it relates to non-oil exports in order to emphasis greater linkage within the manufacturing sector but all was far cry, as all efforts were more theoretical than practical.
More so, the following Naira depreciation at Stock exchange Market, Foreign Exchange market, International foreign exchange market bringing about the dividing oil revenue and foreign exchange Nigerian government resolved to lay emphasis on the industrialization strategy through local sourcing of raw material under this era manufactures were encouraged to find local substitutes or alternatives of their raw materials. This strategy was supposed to be a double edge sword in that it was meant to help maximize local resources utilization as well as help save foreign exchange among other advantages.
In 1989 a new industrial policy was introduced to provide greater employment opportunities to stem the social and political consequence of unemployment to increasing export of manufactured goods as well as improving the nations technological capacity, increasing local content linkage and back ward integration in order to raise the general level of economic activity attracting foreign investment for the acceleration of the pace of the industrial development and increase private sector participation aimed at accelerated pace of industrial development (federal ministry of industries 1989)
Resources have been channelled into Nigerian manufacturing sector through heavy public sector investment, essentials import. Substitution of basic industries through generous financial incentives in addition to a high level of protection for private investment, just as it is available in the table, the table shows the manufacturing sectors share of and percentage contribution of GDP from 1971 to 1988.
Mining Sector – Quarrying and mining are central to Nigerian economy as modern activities in this sector as far as the Nigerian Economy is concerned. The Nigerian Economy includes crude oil ad associated petroleum products. Initially foreign, owned companies were sole responsible for the Nigerian crude. It is on records that the exploration started in the year 1937 by German Bitumen Corporation. Equally an oil prospecting license was granted Shell BP and in 1955 the whole Northern region was given to Mobil explorers for geological work. Mobil abandoned this project after drilling three deep wells in Western Region of Nigeria to no avail in 1961.
It is equally on record that crude oil in Nigeria was first discovered in commercial quantity by shell BP in the 1956 at Oloibiri, in Niger Delta Afam Boma while full scale no shore and off shore oil exploration began shortly after the Federal government of Nigeria issued tan oil prospecting license on the continental Shelf to five companies.