CHAPTER FOUR 4. ECONOMIC GOVERNANCE AND MANAGEMENT “We believe the eight prioritised and approved codes and standards have the potential to promote market efficiency, to control wasteful spending, to consolidate democracy, and to encourage private financial flows – all of which are critical aspects of the quest to reduce poverty and enhance sustainable development…” Declaration on Democracy and Political, Economic and Corporate Governance, paragraph 18 4.1 Overview 420. Nigeria has vast economic potential. With a population of about 140 million and a nominal gross domestic product (GDP) of US$175 billion in 2006, Nigeria is one of the four largest economies in Africa. It accounts for at least 41 per cent of West Africa’s GDP. It is by far Africa’s most populous country (one in every five persons in sub-Saharan Africa is a Nigerian) and has 47 per cent of West Africa’s population. Nigeria has 2 per cent of the world population and is expected to be among the five or six most populated countries in the world by 2025. 421. Nigeria is endowed with a rich stock of natural and human resources. Its current economic strength derives largely from its oil and gas wealth. This contributes about 95 per cent to export revenue, 78 per cent to government revenue (2007) and about 21.93 per cent to GDP (2006). 422. Nigeria is currently the largest oil producer in Africa and the seventhlargest in the world. Its oil reserves are estimated at 36.2 billion barrels. New oil wells are continually being discovered, and reserves are expected to increase to about 40 billion barrels. At current extraction rates, it is estimated that its known and probable oil and gas reserves will last for more than 50 years and its possible reserves for more than 100 years. The Delta (30 per cent), Akwa Ibom (22 per cent), Bayelsa (18.2 per cent) and Rivers (18.20 per cent) States contribute the bulk of oil revenue to Nigeria’s economy. 423. It is, however, a country of paradox. Overall, the country has the potential to build a prosperous economy, reduce poverty significantly and provide the basic social and economic services (that is, infrastructure) its population needs. However, several years of military rule, poor management of public expenditure, overdependence on oil, and uncontrolled rent-seeking behaviour (intended to amass wealth from the oil and gas industry) have undermined the country’s development. 424. The growing oil industry has brought many benefits. They are referred to throughout this report. They extend to the political, social and economic structures and should enable the country to advance more rapidly in all 139