Yet even this remarkable growth pales in com- parison to the speed with which Nigeria now so com- pletely depends on its oil revenue. In 1960 the 2.4 bil- lion naira the country netted from its sale of oil abroad represented just 2.7 percent of its total export earnings. By 1980, such sales (which were worth 12,791.7 billion naira) made up a staggering 96.1 percent of its export income.51 Even today, these proceeds are the mainstay of its export and foreign currency earnings. So much so, that both its economy and the government’s spend- ing plans are totally reliant upon them. Nigeria’s fu- ture prosperity and public services, therefore, depend on a market that is notoriously volatile.
This exposure has been made all the more complete by the federal and state governments’ failure to ade- quately maintain their tax collection capabilities. Argu- ably, this is one of the very few ways in which ordinary Nigerians benefit from their country’s oil windfall. Us- ing such revenue to alleviate the popular tax burden, is a well-established practice and has been adopted by the governments of oil producing countries the world over. Yet for Nigerians—just as for Saudi Arabians, Kuwaitis, Bahrainis, and Bruneians—this arrangement is something of a Faustian pact, for it makes their po- litical leaders even less inclined to pay them any heed. Indeed, since the tax they pay is so inconsequential, their governments are less beholden to them.
The rapid and massive expansion of Nigeria’s oil industry has also stymied the growth of its economy. For like many other countries that earn a significant portion of their income from the sale of this or that natural resource, Nigeria has succumbed to the Dutch Disease. Coined in the late 1970s by the Economist mag- azine to explain the collapse of manufacturing in the Netherlands following its discovery of natural gas a