Dutch Disease Syndrome: The Nigeria’s Resource Trap Sickness, Easy to Catch, Harmful to the System and Difficult to Cure

Abstract

This study examines the economy of Dutch disease syndrome in Nigeria from 1970 – 1985. The paper argues that the discovery of oil in 1970 opened-up windows of opportunities for the country, as a result of high inflow of petrodollar surpluses. The paradoxical effect is this, after reaching its peak period, the surpluses decline steadily and the revenue it generated when prices were high tends to cause “Dutch Disease”. The result of this study establishes the existence of resource curse in the Nigeria’s economy system. Findings of this study shows that the non-support of tradable sector, corruption, mismanagement, lack of diversification of export base and the non-oil sectors like agriculture, industries and mining, affected the country’s economic base. Thus, it was easy for Nigerians to catch the high oil prices, the decline in the oil boom transformed into a harmful poverty disease and it has now become very difficult to cure despite so many efforts. This shows that, there is a paradox of scarcity amidst plenty. This paper adopts the historical research method which relies on qualitative approach of data analysis. The paper draws conclusion to the fact that, oil discovery in Nigeria is a curse rather than a blessing.