Nigerian Oil and Exchange Rates: Indicators of ‘Dutch Disease’


  • John J. Struthers

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    • John Struthers, Senior Lecturer in Economics at Paisley College (High Street, Renfrewshire, Paisley PA12BE, Scotland) has taught at the University of Ilorin (Nigeria) and the University of Sierra Leone, and has published articles in Development and Change, Journal of Energy and Development and Journal of Economic Issues. He is co-author (with H. Speight) of Money, Institutions, Theory and Policy (1986) and is currently working on chapters on international finance for a book on the economic environment of international business.


This article assesses the impact of expanding oil revenues on non-oil sectors of the Nigerian economy from 1960 to 1985/6. Emphasis is placed on the effects of exchange rate appreciation during the 1970s on the agricultural, manufacturing and non-traded goods sectors. The analysis is conducted within a Dutch disease context. Two main conclusions are that the decline of Nigerian agriculture during these years can be attributed to a combination of low real producer prices and insufficient government investment, as well as the overvalued Nigerian naira; and that the high real exchange rate may have benefited the manufacturing sector.