In the period 1950 – 2004, the volume of world production and trade expanded vigorously although not at the same tempo all the time. Accelerating from the first decade, world trade expanded with average annual growth rates of 9.2% in 1960 – 1970, 20.3% in 1970 – 1980, and 5.6% in 1980 – 1990, 6.2% in 1990 – 2000, and 3.4% in 2000 – 2004. Spectacular growth rates of almost 26% and 18% were recorded for 1970-1975 and 1975 – 1980. Associated with this development were: (a) changes in the structure of world production and trade (e.g. increased pluralism of economic production, with relative decline in the dominance of Europe and the rise of Asia); (b) associated with and reinforcing (a), increased pluralism of global financial centres as well as ever increasing volumes, velocity and variegated menus of the aligned financial flows; this in turn promotes trans-nationality of shock transmission regardless of state boundary. Of special note, the increased volume of production led to increased energy demand.

What is thus brought into sharper focus is the impact of world oil market developments and associated events. Notable in this connection were:

  • the rising power of OPEC from 1971 and its influence on crude oil prices, particularly from October 1973 with the Yom Kippur War [and the Arab Oil Embargo] (with its quadrupling of nominal oil prices);
  • events in Iran and Iraq in 1979 and 1980 and the Iran-Iraq was (the Iranian revolution and the Iran-Iraq war combined to more than double crude oil prices from $14 in 1979 to $35 per barrel in 1981);
  • OPEC’s failure to enforce production quotas and thus to control crude oil prices; non OPEC production and consumer reaction to surging prices {OPEC failure to maintain production quotas and thus stabilize prices, with the Saudis as swing producer, from 1982 to 1985};
  • Saudis linking their oil prices to the sport market price and raising output by early 1986, crude oil prices crashed to below $10 per barrel by mid-1986;
  • prices remained weak between 1986 and 1994 though they spiked in September – October 1990 to some $35 per barrel with the uncertainties associated with the Iraqi invasion of Kuwait (August 2, 1990) and the ensuing Gulf War (January 16, 1991 – March 3, 1991) and steadily fell after the war till 1994;
  • price recovery followed, given resurgent world demand dominated largely by the Asian economic crisis, fell from 1996 although 1998 to a new low below $10 per barrel in December, 1998;
  • Price recovery began in early 1999 and, sustained by OPEC production restrain and global economic growth, rose through 2000, with tripling of prices, to a post-1981 high;
  • finally, erosion of excess production capacity, particularly from 2002, in the context of increased production to meet growing world demand [especially strong demand from a rapidly growing Asia], has added a significant risk premium to crude oil prices and has been responsible for the generally sustained record prices in excess of $40 per barrel trending up to $70 per barrel.

Other significant events or processes in the global socio-economic landscape include:

  • the rapid pace of decolonization and eventual success of most armed liberation struggles on the continent;
  • the emergence of the third-world debt problem;
  • the collapse and disintegration of the Soviet Union and the emergence of the United States as the one superpower;
  • the re-conjugation process in Central and Eastern Europe;
  • progress towards the consolidation and expansion of the European Union.
  • the emergence of an imprecise new hegemon “the international community”;
  • and associated with these, increased roles for the UN Security Council, World Bank, IMF and G-8 concert in international affairs;
  • in South Africa, the release from prison of Nelson Mandela, the death of apartheid and the institution of democracy with Nelson Mandela as the first President of a non-racial democratic state;
  • continued rapid progress of the countries of South-East-Asia and the emergence of China and India as new world production powers;
  • in our ECOWAS sub-region, despite progress in the realization of Community objectives, generally “a time of trouble”, with internal warfare in Liberia, Sierra Leone, and the Cote d’Ivoire.

With regards to the emergence of the third world debt crisis, in the boom period prior to 1981, the key problem for the international financial system was, so to speak, especially one of the financial intermediation, with international banks recycling OPEC surplus Petro-dollars in the cash-strapped developing countries, consequent on the first oil shock and its aftermath, particularly OPEC oil price developments. In result, there was much unprogrammed foreign borrowing by many developing countries, including Nigeria – and thus the third world external debt burden. Debt management became an issue when in 1981, in the context of the second oil shock, Argentina, unexpectedly and unilaterally, declared a moratorium on the servicing of its external debt. This created a spillover throughout the financial world and became the most significant cause of the third world debt crisis.

Nigeria responded to these global challenges as best as she could, while grappling with her own problems.