Comparative politics 4 - Essay Example

The petroleum is excavated in areas of Niger Delta, which also happens to host most of the oil industries and part of the Nigerian slum population. The exploration of the petroleum, commonly addressed as the ‘black gold’, and the growth of the petroleum industries have led to specific issues that the citizens feel need to be addressed, for the peace and development of their nation. The existence of petroleum not only benefits the Nigerians, but also negatively affects them; hence it is an overwhelming blessing in terms of economic development and investment, but also a curse due to environmental degradation, corruption, and human violation among others within the people.

How Nigeria Benefits Economic development: The Nigerian economic performance has been shaped up through sale of petroleum products. It generates most of its revenue from the exportation and domestic sales of the oil products, compared to other goods from other sectors. According to Balouga, onshore oil exploration has greatly improved the nation’s daily production capacity, to approximately 2.3 million barrels on a daily basis, and eventually raised her proven reserves to nearly 37 billion barrels ( 2012, 23).

In the Nigerian economy, more than ? of the gross earning comes from petroleum sales, domestically and internationally (especially through trading with the US and European nations). The oil industry contributes to Nigerian GDP, though not entirely all of the industry’s value added products get to be retained in Nigeria, due to the numerous involvements of foreign operators in the industry. In addition to the ratio of the GDP, the government collects huge amounts of tax from the foreign and local companies operating in oil industries, influences the purchasing power of the society through spending on goods and services, and enhances foreign exchange reserve (Odularu 2008, 11-13).

Crude oil and natural gases are major sources of energy in the country, providing the industries and refineries with a readily and cheap energy source for its smooth operations. Although the economy has experienced slow and minimal growth compared to other oil producing countries and competitors, it is evident that oil money continues to transform the nation. Investment and employment: Since the discovery of crude oil, the numbers of companies established in Nigeria have grown immensely, boosting the oil industry more than other sectors such as agriculture and fisheries.

These include several joint venture companies like Shell (the largest), which produces about 50 percent of Nigeria’s oil, and the other joint ventures being operated by Chevron Texaco, Exxon Mobil, TotalfinaElf and ENI/Agip (Odularu 2008, 8). These are many investors that directly work in Nigeria’s oil industry; others are indirect investors, who participate in economic development. According to Balouga, “investment in Nigeria’s oil industry currently amounts to about $18 billion annually” and is anticipated to increase over time (2012, 25).

Over time, refineries have been established after 1950, increasing the ability to refine their products. First and second Port Harcourt, Warri and Kaduna refineries have developed to enhance their processing capabilities, even though they operate below their expected capacities. The Nigerian population continues to benefit from the employment opportunities in oil companies, from the basic activities