Subject: Social Studies
Lesson Objectives: by the end of the lesson, the learners should be able to:
1. Define the term national economy;
2. Identify the determinants of economic life of a nation;
3. Mention and explain examples of national economic activities.
The topic is quite broad and needs to be divided into periods. Teachers please take note of this.
MEANING OF NATIONAL ECONOMY
How does a nation makes her wealth? The topic national economy tends to provide answers to this question.
The term National economy describes how the country’s wealth is produced and utilized. It also refers to the goods and services which a country is able to produce at any given time using all the Natural, Human and Capital resources available to it. This can be simplified by saying that National economy include all activities that relate to production, distribution and consumption of goods and services in a country. One can still describe National economy as the management and judicious use of resources or wealth of a nation.
The economic life of a nation is determined by the physical environment and the human and material resources available.
Natural Resources are the free gift of nature. They are those resources that nature has endowed a country with, which are used in the production of goods and services.
Human Resources refer to the skill and qualities of people available and ready to work within the economy. The human resources constitute the majority of the country’s labour force both skilled and unskilled.
Capital resources are those things made by human beings to make the production of goods and services easy.
EXAMPLES OF NATIONAL ECONOMIC ACTIVITIES
Examples of economic activities that are undertaken in the production of national economy include:
Trading, Farming, Mining, Banking, Manufacturing, Fishing,
Forestry, Teaching, Driving, Quarrying, Building and construction, Processing, Transportation and communication, Insurance, Forestry, Security, Research etc.
Farming involves cultivation of crops and rearing of animals for man’s use. We get food crops, cash crops as well as livestock through farming. A good number of Nigerians are farmers. Farming was Nigeria mainstay of the economy before crude oil was discovered.
Food crops like yam, beans, cassava, rice, cocoyam etc. and cash crops like cotton, cocoa, groundnut, rubber etc. are made available through farming.
Mining deals with evacuation or extraction of meaning resources from the soil. Examples of mineral resources are gold, tin, petroleum, limestone, iron-ore, coal, etc. these mineral resources are major export commodities for Nigeria and as well provide raw materials for our industries.
This is the act of buying and selling of goods and services to sustain the economic life of a nation. Trade can be classified into two: Home trade and foreign or international trade
Home Trade is the act of buying and selling of goods and services within a geographical area of a nation.
International Trade or foreign trade is the process of buying and selling of goods and services between two or more or more countries. It is divided into import and export.
This is the application of man-made tools (machineries) to produce food items and industrial goods. It is carried out in factories and is a major source of employment in industrial societies. To manufacture means to make or produce goods, especially in large quantities, machines. Manufacturing is carried out where there are raw materials.
Most manufacturing enterprises in Nigeria are located mainly in the state capitals and in big cities. Examples are Lagos (Apapa, Ikeja) Ibadan, Kano, Kaduna, Zaria, Jos, Aba, Onitsha, Shagamu, Ijebu-Ode, Ondo, Makurdi, Warri and Port Harcourt.
This is the catching and gathering of fish and other aquatic animals from rivers and seas. It is the occupation or major economic activity of people who live around the riverine areas. Fish as a source of protein is richer than meat. Nowadays, supply of fish by natural water has not been meeting man’s high demand for fish. So, fish farming in artificial waters like ponds, is now extensively practiced to supplement natural supply.
THE NATURE OF THE NIGERIAN ECONOMY
The nature of the Nigerian economy refers to the characteristics of the Nigerian economy which reveal the two dimensions of mono-product economy and import-oriented economy. Nigeria has a dual economy with a modern segment dependent on oil earnings, overlaid by a traditional, agricultural and trading economy.
At independence, Nigeria was purely an agrarian economy and thereby earned the largest percentage of her foreign exchange earnings from exportations of agricultural produce. The oil sector, which emerged in the 1960s and was firmly established during the 1970s is now of overwhelming importance to the point of over-dependence.
A mono-product economy like Nigeria depends almost entirely on one source of national production to finance her economy. In this case, her economy depends mainly on the export of crude oil and therefore is also referred to as a mono culture product economy.
Consequently, a fall or rise in the price of crude oil in the world market affects all her economic activities in the country.
ADVANTAGES OF MONO PRODUCT ECONOMY
A mono product economy derives its earnings from its main product. It is therefore easy to develop the main product.
DISADVANTAGES OF MONO PRODUCT ECONOMY
- A mono product economy is unstable, an increase or decrease in the world price of the same product will affect the budget of the country.
- A mono product economy may witness a high percentage of unemployment.
IMPORT ORIENTED ECONOMY
As a result of the neglect, weakness and failure of other sectors of the Nigerian economy i.e. depriving them to take care of the oil sector, the country imports heavily every other commodity, including food items. The implication of this is that we pay more foreign exchange for imports than we earn from exports.
ADVANTAGES OF IMPORT ORIENTED ECONOMY ECONOMY
- An import oriented economy weakens the foreign exchange base of the country’s currency.
- The economy is dependent i.e. it cannot stand on its own.
- It weakens local production of products that are imported into the country.
- The nation while it imports finished goods may also import problems that can affect seriously its economy.
THE NEED FOR A DIVERSIFICATION OF THE ECONOMY
The term diversify means to expand. To diversify a nation’s economy is to expand the economic (product) base of that nation, so that it can rely on a variety of them instead of relying on only one source of income. Diversification makes it possible for a nation to have more export commodities, from which the country can generate more foreign exchange.
The need for the diversification of the Nigerian economy can be seen in the disadvantages of a mono product economy and the advantages of a diversified economy. In summary, the following are the need for diversification of an economy:
- The need for inter sectoral dependence and balance in the economy.
- The need for more sources of export products in order to reduce importation of goods and services that can be produced in the system.
- Promotion of international trade that will lead to positive balance of payment.
- The need for a dynamic economy capable of absorbing shock in the system while maintaining full employment.
- The need for a high rate of economic growth and development.
SECTORS OF THE NIGERIAN ECONOMY
Sector: The term Sector refers to a part of an area of activity, especially of a country’s economy.
Sector of an Economy: Sectors of an economy can be defined as parts or areas of economic activities of a nation. The various areas of production of services with their respective resources are referred to as sectors of an economy.
VARIOUS SECTORS OF THE NIGERIAN ECONOMY
Nigerian economic sectors can be sub-divided into private sector and public sector. As discussed in our previous lesson, the various sectors of the Nigerian economy include: agriculture, education, petroleum (energy), power, telecommunications, postal services, etc.
A. PRIVATE SECTOR OF NIGERIA ECONOMY
The private sector of the Nigerian economy consist of the following three major sectors: Primary sector, Secondary sector, and Tertiary sector.
i. PRIMARY SECTOR: The primary sector of Nigerian economy has to do with economic activities that involve extracting raw materials from the land or ground. Examples of economic activities in the primary sector of Nigerian economy are: fishing, farming (agriculture), quarrying, forestry, lumbering, hunting, mining (minerals).
ii. SECONDARY SECTOR: The secondary sector has to do with economic activities that involve conversion of raw materials into finished products. This includes activities such as manufacturing, processing, construction and generation of electricity from various sources.
iii. TERTIARY SECTOR: The tertiary sector deals with economic activities like trading, banking, insurance, education, communication, transportation and other activities in which people provide services. Examples are the civil service and similar operations.
B. PUBLIC SECTOR OF THE NIGERIAN ECONOMY
The public sector of the Nigerian economy also includes some sections of primary and secondary sector of the Nigerian economy. However, the public sector of the Nigerian economy is more rooted or found more in the tertiary sector of the economy. It include quaternary sector which deals with researches carried out in the tertiary institutions of learning. The public sector of the Nigerian economy which are also called sub-sectors and they include the following: Nigerian Postal Service (NIPOST) Nigerian Telecommunications (NITEL) Power Holding Company Nigeria (PHCN) Nigeria Television Authority (NTA) Etc.
IMPORTANCE OF THE PRIMARY SECTOR TO THE NIGERIAN ECONOMY
- Provision of food Provision of shelter
- Provision of clothing
- Provision of raw materials for industries
- Provision of employment
- Provision of foreign exchange exchange earning
- Source of income
- Rural development
IMPORTANCE OF THE SECONDARY SECTOR TO THE NIGERIAN ECONOMY
- Serves as a source of employment to both skilled and unskilled labour
- Serves as foreign exchange to both individuals and government
- Develops the industries of a particular of a country
IMPORTANCE OF THE TERTIARY SECTOR TO THE NIGERIAN ECONOMY
- Provides employment opportunities to the citizens of the country.
- This sector manages the wealth of the country e.g. banking Individuals, groups, and government make their wealth from this sector Harnesses primary and secondary sectors of the economy.
Done studying? See previous lessons on Social Studies.
Take a quick test for this lesson
1. What is National economy?
2. Briefly explain the following economic terms as described in the lesson.
a. Human resources
b. Capital resources.
3.Write short notes on the following national economic activities
4. Explain the nature of Nigerian economy
5. Explain briefly the following terms
- Mono product economy
- Import oriented economy.
6. State five reasons why the Nigerian economy should be diversified.
7. Describe Nigeria’s economy as mono product and import oriented economy.
8. State the advantages and disadvantages of these types of economy.
9. Define the terms sector, sector of an economy;
10. Identify the various sectors of the Nigerian Economy.
11. State the importance of the Different Sectors of the Nigerian Economy.
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