The end of Nigeria’s civil war in January 1970 coincided with one of the most dramatic shifts in the nation’s economic history. Within just three years, the 1973 Arab–Israeli war triggered a global oil crisis, causing petroleum prices to soar. Nigeria, already Africa’s largest oil producer, suddenly became a key exporter and found itself flush with revenues unprecedented in its history.
Under General Yakubu Gowon’s military government, this oil windfall promised reconstruction, modernisation, and industrialisation. Yet the opportunities it presented were largely squandered. Instead of establishing a foundation for sustainable growth, the period entrenched corruption, waste, and overdependence on oil, a legacy that continues to shape Nigeria’s economy today.
The Oil Boom and Rising Expectations.
Although crude oil production in Nigeria began in the late 1950s, it was in the 1970s that petroleum revenue became central to state finances. Following the 1973 crisis, oil prices quadrupled on the global market, transforming Nigeria’s fiscal position almost overnight.
Between 1970 and 1974, government revenues from oil surged from roughly ₦166 million to more than ₦3.7 billion. This dramatic increase arrived at a critical time. The civil war had devastated infrastructure, displaced millions, and deepened social divisions. Gowon’s government saw oil wealth as the means to rebuild the federation and project Nigeria as a modern industrial power.
The most ambitious framework was the Third National Development Plan (1975–1980). Although prepared during Gowon’s tenure, it was not executed until after his removal. It envisioned vast spending on roads, schools, hospitals, industries, and power generation. The optimism of the time was captured in the popular phrase, “money is no problem.”
Grand Projects and Unrealised Ambitions.
Flush with cash, Nigeria embarked on ambitious mega-projects. Among the most famous was the Ajaokuta Steel Complex, planned as the cornerstone of Nigeria’s industrialisation. Negotiations with the Soviet Union began under Gowon, but the formal contract was only signed in 1979 during General Olusegun Obasanjo’s administration. While Gowon initiated groundwork, attributing Ajaokuta directly to his regime is misleading.
Similar examples reveal how oil wealth encouraged poorly conceived ventures:
- Industrial estates were constructed without proper feasibility studies.
- Refineries and factories were approved despite inadequate technical expertise.
- Infrastructure allocation often followed political rather than economic logic.
Some projects commonly associated with Gowon’s era were in fact launched later. The decision to move Nigeria’s capital to Abuja was made in 1976 under General Murtala Mohammed, not Gowon. Likewise, the Nigerian National Petroleum Corporation (NNPC) was established in 1977, two years after Gowon’s removal from power.
Corruption, Mismanagement, and the “Resource Curse”.
The sudden influx of oil money weakened fiscal discipline. Procurement procedures were opaque, contracts inflated, and accountability minimal. Import licences and foreign exchange allocations became tools of patronage, enriching elites and fuelling corruption.
Economists describe this as the beginning of Nigeria’s “resource curse.” Instead of diversifying, the economy became dangerously dependent on oil. Agriculture, which had accounted for over 70 per cent of exports in the 1960s, collapsed during the 1970s. Nigeria increasingly relied on food imports to feed its population.
The promise of oil wealth was thus undermined by weak institutions, poor planning, and rent-seeking behaviour.
Public Perception and Disillusionment.
Initially, Nigerians celebrated the oil boom. Newspapers praised the country’s rapid ascent, and many believed Nigeria was on the verge of becoming a global industrial power.
But enthusiasm quickly waned. Projects were delayed or abandoned, while corruption scandals spread. Ordinary Nigerians saw little improvement in housing, transport, or public utilities. Intellectuals and journalists began criticising Gowon’s government for wasteful spending and lack of accountability.
By 1974–75, Gowon faced mounting criticism not only for economic mismanagement but also for failing to honour his pledge to return the country to civilian rule by 1976. Discontent spread among the public and within the military. In July 1975, while attending an Organisation of African Unity summit in Kampala, Gowon was overthrown in a bloodless coup.
Lessons from Gowon’s Era.
The oil boom of the 1970s remains a defining chapter in Nigeria’s post-war history. Its lessons are still relevant:
- Strong institutions matter – Wealth alone cannot drive development without robust planning and oversight.
- Project prioritisation is crucial – Pursuing too many mega-projects overstretched limited managerial capacity.
- Transparency prevents waste – Weak procurement systems entrenched corruption.
- Economic diversification is essential – Neglecting agriculture and manufacturing left Nigeria vulnerable to oil price shocks.
- Accountability builds trust – Excluding citizens from governance fostered mistrust and cynicism.
Author’s Note.
The Gowon era offered Nigeria an unparalleled opportunity to rebuild and modernise. Oil wealth brought hopes of prosperity, but poor planning and corruption meant that much of the windfall was wasted. While some initiatives planted seeds for future development, many became monuments to inefficiency and lost potential.
Today, with oil still dominating government revenue, the same challenges persist. The lesson from the 1970s is clear: resource wealth must be managed with discipline, transparency, and a long-term vision, or history will repeat itself.
References:
Tom Forrest, Politics and Economic Development in Nigeria (Westview Press, 1993).
Toyin Falola & Matthew Heaton, A History of Nigeria (Cambridge University Press, 2008).
Gavin Williams, “The Politics of the Oil Boom, 1971–1977,” Journal of Modern African Studies 17, no. 2 (1979).
