four of the thematic areas of the African Peer Review Mechanism (APRM). Some of the major benefits for the economy that derive from increased oil revenues include: 425. 140 • Substantial surpluses on the current account of the balance of payments. This has enabled the country to increase its foreign reserves and reduce its foreign debt. • Increases in the tax revenue of government. This has provided muchneeded scope for managing the budget. • Increased liquidity in the financial sector. This has facilitated extensive reforms, consolidation and rationalisation. Overreliance on oil has, however, also brought a number of disadvantages that are pointed out in the various sections of this report. These include: • Neglect of other important sectors of the economy, such as agriculture and manufacturing. • Increased vulnerability to external shocks in the oil market. • Neglect in collecting and administering taxes. • Adverse environmental consequences. 426. Nigeria exemplifies the ‘oil curse’, or failure to use its oil wealth prudently. Despite cumulative revenue estimated at about US$350 billion over a 35year period, Nigeria continues to rank low on all development indicators. There has been an alarming increase in the incidence of poverty. Nigeria now has about 6 per cent of the poor in the world. The country scores below the sub-Saharan African average on several socioeconomic indicators, including a per capita gross national income (GNI) of US$620 in 2006, infant mortality, access to water and sanitation services, and life expectancy. Nigeria unfortunately provides some of the worst examples of rent-seeking and corruption. These undermine good governance and have become a global benchmark for irresponsible management of oil wealth. 427. The advantages of increased oil revenue seem to have contributed more to improving the internal and external financial position of the economy than to real economic activity, particularly in sectors not directly linked to the oil extracting and exporting industries. Communities generally feel that they do not share proportionately in the additional wealth created by the oil boom. Indeed, chapter 6 of this report, which covers socioeconomic development, focuses on the paradox of endemic poverty in the midst of plenty. 428. Ironically, the discovery and subsequent mismanagement of the nation’s oil reserves have undermined the nation’s development by allocating resources to oil production at the expense of other sectors. They have fuelled excessive spending, inflation and debt, and reduced domestic earning and spending power.