Dependence on oil and gas and lack of economic diversification A major factor behind the low growth rates and high poverty levels in Nigeria is the lack of economic diversification. Oil currently provides about 95 per cent of foreign exchange earnings and 80 per cent of budgetary revenues. In recent years, the astronomical growth in Nigeria’s oil revenues has come at the expense of traditional revenue sources. This has undermined the nation’s broad revenue base and heightened its vulnerability to volatile commodity prices and external trade shocks. Despite its huge reserves, Nigeria imports virtually all its petrol because it has not invested sufficiently in oil refineries. Nigeria’s dependence on crude oil exports implies that it benefits little from the potential indirect economic benefits (such as jobs associated with producing petroleum by-products) associated with crude oil refining. The scourge of corruption Corruption remains the greatest and most troubling challenge to realising Nigeria’s huge developmental potential. This makes it unlikely that the country will achieve the vision of the Financial System Strategy of 2020, which aspires to move the country’s GDP to the top 20 in the world. The APR Panel noted significant efforts in the fight against corruption. These include the activities of the CCB, the ICPC and the EFCC. Despite these laudable achievements, Nigeria still faces the herculean task of tackling corruption internally. Political and social will must be strengthened in order to tackle the scourge. Ineffective policy and programme implementation, and poor service delivery NEEDS I admits that “Nigeria’s experience has been one of formulating good plans, policies and programmes and then failing to achieve objectives because of ineffective implementation – or no implementation”.7 The lack of effective policy and programme implementation in Nigeria can be explained principally by the lack of strong political will, coupled with weak accountability mechanisms. In a sense, this is also attributable to attitudinal and behavioural issues that are the legacy of military rule. Nigeria should consider: introducing strict penalties for line agencies that do not deliver on their targets; stringently enforcing the said penalties; establishing a client-feedback mechanism; and introducing periodic public reporting, to the general public, on the implementation of NEEDS and other programmes. The informal sector As in other African countries, most of the growth in the informal sector in Nigeria is the result of an increase in the number of new enterprises 7 20 Government of Nigeria, NEEDS, 2004, page 103.