Journal of Global Resources
Biannual International Peer-Reviewed Journal
ISSN: 2395-3160 (Print)/2455-2445 (Online)

January 2021
Volume 07 (01)
Crossref DOI 10.46587

DOI: 10.46587/JGR.2021.v07i01.006

06
CRITIQUE OF RESOURCE CURSE FRAMEWORK
Yunusa Hassan
Department of Geography, Umar Suleiman College of Education Gashua, Nigeria
Department of Geography, NIMS University Rajasthan, India
Email: contactyunusah@gmail.com
Abstract: It is a common axiom that most resource rich countries are thought to be having
greater tendency of contracting natural resource effects. Being a resource rich country haspressed many developing economies to over-spend on recurrent expenditure, wastefulspending on provision of subsidies, palliatives, social relief packages as well as
construction of monuments ignoring the essential sector of the economy and welfare; suchas healthcare services, infrastructures, education, industries, etc. This discourse is a review
of critically underpinning framework of natural resource curse effects through identifying
key driving mechanisms. This study uncovered that these key mechanisms are classified
into the economic mechanism on one part and the political mechanism on the other part.
The economic mechanisms were thought to be closely associated with regional economic
realities and their momentous poor fiscal performance, whereas the political mechanisms
were believed to be confined to political complexities of the natural resource regions andinstitutions. However, the study further identified a recent consensus on recent politicalvariables on linkages between regional natural resource wealth and development
outcomes and also emphasized on comprehensive indulgence of varieties of social
feasibility issues. Moreover, this discourse further affirmed the essential need for morestudies at country considering the close affiliation of resource curse rents and the decisionof political elites and ruling class.
Key words: Dutch Disease, Geographical Political Economy, Resource Dependence
Introduction
Natural resource curse is a system of political economy that believed countries endowedwith natural resources have been found to be lacking relative to countries with fewer natural
resources in most of developmental and prosperity indices (Auty 1993; Arezki and
Brückner, 2011). This political economic thought is also known as the “paradox of plenty”.
It is a common axiom that there are various inter-related factors that are affecting how
natural resource wealth (rent) consequently resulted to effective economic growth orotherwise. Though, there is connecting as well as various divergences and conflicting ideas
regarding the natural resource curse issues in several studies at both national and global
arena, however, there is no universally one size fit all accepted concept on how natural
resource rent generated can be spend. Most resource-rich countries of the world have
proven to be hopelessness in term of achieving effective natural resource rent utilization
despites their abundances (Auty, 1993; Gylfason, 1999; Sarmidi, 2014).
There is no model that provided universal acceptability with proven records of curing
effects of natural resource curse. Therefore, this study attempts to theoretically provide
succinct dossier on the effects of resource curse on various regions’ economies anddevelopment. Many studies have demonstrated that the effects of natural resource
abundances in most resource-rich countries is usually less economically viable,
consequently, economies endowed with abundance resources mostly ends up expose to51

conflicts and authoritarian regime relative to economies without resources (Humphreys etal., 2007; Ross, 2007). Though, it was on several occasions proven that when resource
rents are efficiently utilized, they tend to be potentially capable of creating greater regional
prosperity, growths and developments (Auty 1993; Gylfason, 1999; Humphreys et al., 2007;
Sarmidi, 2014). And on a contrary note, when natural resource rents are squandered andmismanaged, they likewise tend to exposes the resource region to social conflicts, prone
to corruption and unrest that may largely be associated with economic instability andlifelong environmental damages caused (Auty, 1993; Ross, 2007).
Since most of non-renewable resources and some fraction of renewable resources
only exist in an exhaustible quantity, this means that they are available in limited quantity
and can be used up if not properly managed (Badeeb et al., 2016). That is why reasonablestudies of recent natural resource economics and theories prioritize the identification ofdiverse measures such as optimum resource exploitation for realization of economic
benefits. Badeeb et al. (2016) also reported optimum resource exploitation is essentiallydesirable in order to prevent faster depletion and extinction. However, the recent rapid
exploitation of natural resource was driven by rapid population increase and increasing
standard of living (Sarmidi, 2014; Farhadi et al., 2015). Moreover, on a temporal scale ofmost renewable resources exploitations, the exhaustion periods are mainly greater than
the resource recovery period; therefore, it creates the setting of simple scarcity. For
example, the rate at which carbon di oxide (CO2) is primarily recycled throughphotosynthesis, however, the rate at which recycle is done is greater than the rate at which
CO2 is realized in the atmosphere (Frankel, 2010). Another example is the rate at which
crude oil was recycled usually has an average duration of millions of years; hence, it recent
exploitation rate is far greater than it regeneration duration (Frankel, 2010).
Causes of Natural Resource Curse
Several social scientists and economists have identified various causal channels of
resources curse, and also anticipated different results in economic prosperity anddevelopment. Many studies have demonstrated that most of these resource-rich nations
have greater tendencies of over-spending on wasteful monuments (Humphreys et al., 2007
and Ross, 2007). For example, these countries spent more fuel subsidies and large
monuments while under-spending on major sections of the economy and welfare; forinstance, the health care services, infrastructures, education, etc. (Auty 1993; Arezki and
Brückner, 2011; Sarmidi, 2014). Though, this anticipation have some defects: such as thepossibility of deliberate or accidental bias on the perceived influences of resource
dependency as well as the impacts of institutional environment (Lam and Wantchekon,
2003; Sarmidi, 2014; Gylfason, 1999; Isham, 2005; Brunnschweiler, 2008; Blanco andGrier, 2012; Bhattacharyya and Hodler, 2014).However, the second defect can be
influenced by the relative level of democratic influences on the resource measures thoughvarious effects of the discovery of oil on the respected region’ estimated endowment (Arezki
and Nabli, 2012).
This study identified various studies that demonstrated the domination of resource
effects on particular institutional aspects and policies; for instance, a study by Beck andLaeven (2006) on the discovery of Eastern Europe resources which consequently
associated the delayed the region’ reforms in the region the resource discovery. It isdemonstrated that resource rents mostly expose countries to possible autocratic
administration, buying supports and riggings of elections. Moreover, another study also
reported that the lesser the amount of media freedom in oil-rich nations, the higher the
chances of autocratic regimes (Egorov et al., 2009). A study conducted by Andersen andAslaksen (2013) further uncovered that natural resource rent only affects leadershipduration and bonding to non-democratic regimes. Even though several studies had
empirically proved and that in most dreadful regional institutions, natural resources rent
thus increases corruption and consequently reduces corporate transparency(Bhattacharyya and Hodler, 2010; Vincente, 2010; Andersen and Aslaksen, 2013).
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A natural resource rent especially in weaker institutional settings was believed to bedelaying the diversification and reforms within the economy and also increases incentives
that engaged in various forms of rent-seeking. In an autocratic setting of natural resource
rents, national wealth is mainly used by the elites to strengthen their hands to hold on firmly
to power (Bhattacharyya and Hodler, 2010). Moreover, this study further identified manysuccessful examples of efficient management of natural resource rents; for instance,
regional establishment of sovereign wealth funds that are capable of reducing pricevolatility and subsequent creation of decorum for transparency that can be easily
implantable. In line with Stevens and Dietsche (2008) study that reported that the use oflarge monetary investments could be perfectly legitimate, and also consumption can be
skewed toward recent capital scarce developing economies. In the midst of all these
uncertainties, this study recognizes the following implications of natural resource rents foroverall policies and also anticipates both political as well as the economic regional
mechanisms that are underpinning to the contemporary resource curse effects.
Mechanisms of Natural Resource Curse
The present study critically analyzed various studies related to the roles of natural
resources curse towards regional economic growth and prosperity, and consequently
discovered that social scientists and economists have in various time analyzes this notion
and successfully identified numerous mechanisms. Some of the studies that haveempirically provided detailed literatures on the contemporary resource curse adversities
include Leiti and Weidmann (1999), Ross (2007), Frankel (2010), Arezki and Nabili (2012),
Boschini et al. (2013), Apergis and Payne, (2014), Bhattacharyya and Hodler (2014), andBadeeb et al., (2016). These above mentioned studies had reported about the leading
theories and concepts on how these special characteristics of natural resource revenue
adversely create several challenges for resource-rich economies. Therefore, the present
study further categorized the mechanisms of natural resource curse into two overlappinggroups, i.e. economic and political mechanism.
Economic Mechanism
The basis of many natural resource based trails on development and retardation on longrun are traced to diverse allied economic mechanism; such as the Dutch diseases, failureof economic policies, volatility of price, the neglect of the education, inefficient spending
and borrowing.
Dutch Diseases
Dutch diseases model was initially developed by Corden and Neary (1982) and Corden(1984) as result of the Dutch manufacturing sector loosen after the discovery of naturalgas. A well-known explanation of this model suggested that a resource windfall generates
additional wealth which on the other hand raises the prices of non-tradable goods andservices. This in turn leads to real exchange rate appreciation and higher wages in theservices sector (Corden, 1984). The resulting reallocation of capital and labor to the nontradable sector and to the resource sector causes the manufacturing sector to contract, andwas called “de-industrialization” by Sachs and Warner (1997). This form of deindustrialization mechanism is called the Dutch diseases. Dutch disease is a concept ofgeographical political economy that occurred due to the exchange rate appreciation andthe depreciation of manufacturing exports which was first observed in Netherlands following
the discovery of North Sea gas in late 1950s (Sachs and Warner, 2001). The Dutch
diseases mechanism demonstrated that any frenziedly immense raise in natural resource
revenue can subsequently hurts other sectors of the economy (particularly export-based
manufacturing sector).
A study by Frankel (2010) reported that the negative effects of resource rent on the
resource-rich nation’s economic growth, hence, this study categorically refer to this notion
as “spending effect”. Due to the higher pay for labor shift to the natural resource based
sector, accordingly, there is an increasing cost of production of other traditionally export
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sector; for instance, agriculture and manufacturing industries (Frankel, 2010). This
unfavorable scenario was found to have negatively affected the non-natural resource based
sectors, and it is called the resource “pull effect” (Humphreys et al., 2007). Though, theharmful effect of natural resources on other industries is not really documented in many
developing economies like Nigeria, hence, it was believed to be significantly documented
in other countries such as Iran, Russia, Trinidad and Tobago, Venezuela, Angola, Ghana,
Botswana, and all of which have either stunted manufacturing sectors or saw abrupt decline
in manufacturing (Mehrara, 2009; Hammond, 2011; Farhadi et al., 2015; Blanco and Grier,
2012; Apergis et al., 2014). However, assorted literatures have reported that the impactsof Dutch diseases can be minimized if the affected nation has absorptive competence totransform resource rent generations into tangible investments such as the construction ofroads and electricity generation (Hammond, 2011; Apergis et al., 2014; Farhadi et al.,2015;).
Recently, some countries like Norway, UAE, Chile and Indonesia have successfully
managed to overcome the effects of Dutch diseases for more than over three decades(Ismail, 2010; Boschini et al., 2013). Though, these studies further empirically affirmed that
there are still possibilities of numerous outcomes besides been suffering from adverse
effects of Dutch diseases (Ismail, 2010; Boschini et al., 2013). But it is also believed that a
resource boom has capability of causing declining any regional manufacturing exports inaddition to expansion of the services sector (Sala-i-Martin and Subramanian, 2003).
However, this study thought that the theory of Dutch disease failed to explain the rationale
why some countries fail and others succeeded besides all living under given level ofresource dependence. These explained why the contractions of the manufacturing sector
is not necessarily harmful per se, but mainly lowers development on long-run regional
growth and development as seen in Saudi Arabia, Gulf Emirate, Kazakhstan and Mexico.
Failure of Economic Policies
Most resource-rich economies tend to have over-confidence in their economic policies
which in return resulted to lower economic productivity. A study by Ross (2007) reported
that a natural resource funded economy mainly cushioned urbanization, neglecting thehigher education shortfall and general infrastructures. On the demand side, this resource
dependency is also competent in diminishing peoples’ incentives to accumulate humancapital as further reported by Ross (2007). The reflection from both sides (the demand andsupply) supported the public expenditure on education relative to national income isinversely related to natural capital as proven by Beck and Leaven (2006). Hence, there isno universally generalized metrics for quantifying failure in economic policies as proven by
several studies (Beck and Leaven, 2006; Ross, 2007). For instance, this study understands
that Norway is conspicuous as an economic producer topped international league tables
for governance and economic performance. On the other hand, the study also identified
Botswana and Conga to be having abundant diamond deposits, however, Botswana isparamount in terms of stability and rapid income growth, while Congo is among the worst.
Volatility in Commodity PriceMarket instability through commodity price volatility increases as uncertainty hinderedefficient economic development, thereby measuring revenue from the natural resource
sector become complicated. Various studies reported that price volatility lessen economic
growth at every level (Humphreys et al., 2007; Frankel, 2010). This study understood that
commodity price volatility mainly shrinks foreign exchange earnings and government
revenues, and subsequently reduce the country’s abilities to meet the condition required
for expansionary monetary policy (Frankel, 2010). Though, Humphreys et al. (2007) argued
that the extent of resource prices fluctuations can be amplified by international lending.
However, this study understood that when commodity prices are high within any region, thecommodity-rich nations borrows from abroad to worsen the boom as seen notably in many
countries within Middle East, Africa and Latin America. On a contrary note, this study further
believed that when the prices of commodities fall within resource rich economies,54

international lenders demand repayment as well as push for expenditure reduction. In thisregards, the response and counter response pushed many resource rich nations like
Nigeria, Ecuador, Indonesia, Iran, Bolivia, Venezuela and Mexico to rolled deep into debt
crises in 1980s as reported by Humphreys et al. (2007).
Inefficient Spending and Borrowing
The present study understood that several literatures reported that it is easier said thandone to resourcefully to spend in an incessant economy that is facing unpredicted andfluctuating revenues (Vincente, P. C. 2010; Bulte et al., 2005). Though, accumulated rents
collected by resource rich governments can change drastically because of resource market
price fluctuations as well as production cost. Most resource rich nations often get trappedin “boom-bust” cycles where the revenue are spent on legacy projects (such as large
government buildings and airports) and later make painful spending cuts when revenue
declined (Vincente, P. C. 2010). Several pertinent literatures have demonstrated that
resource rich nations usually have greater tendency to over-spend on government salaries,
inefficient fuel subsidies and large monuments (Singer, 1950; Bulte et al., 2005; Hammond,2011).
In most cases, these resource rich governments often over burrowed thinking that
their economies received colossal revenues. Hence, this form of behavior led to the debt
crisis in countries like Nigeria, Mexico and Venezuela (Hammond, 2011). This study
confirmed the thought of Loayza et al. (2013) that this scenario was believed to reason for
exposure of private industries, and their subsequent over investing during the boom times
as well as experiencing prevalent bankruptcy afterwards. On the other hand, United State,
Australia and Norway are example of developed resource rich nations with efficient
spending and limited borrowings.
Political Mechanisms
Numerous social scientists in their respective studies acknowledge some key politicalchannels or mechanisms through which resource curse may operate politically. For
instance, diverse issues such as rent seeking, corruption, weak institutional development,
conflict, democracy, patriarchy and gender challenges, social and environmental problems
are systematically recognized as key political mechanisms of natural resource curse (Leiti
and Weidmann, 1999; Collier and Hoeffler, 2005; Arezki and Gylfason, 2011; Barma et al.,2012; Apergis and Payne, 2014; Sarmidi et al., 2014).
Rent Seeking
A study by Lam and Wantchekon (2003) labeled the rent seeking as a “Political Dutch
Disease”. It was argued by many studies that in some countries, the bonus of resources
revenue mostly boosts only the power of political elites and leaders, and consequently
believed to be having the ability to broaden revenue disparities within the resource richregions (Gylfason, 2001; Hodler, 2006; Iimi, 2007; Deacon and Rode, 2012). In rent
seeking, it was believed that revenues generated from natural resource rent are mainly
shared by the elite groups to their immediate circles rather than investing it on upgrade ofsocioeconomic infrastructures. This study is in line with Davis and Tilton (2005) and Iimi
(2007) studies which concurred that the main cause of conflict between domestic
stakeholders (i.e. politicians and local tribes) is mainly the windfall of resource revenue.
Moreover, the study affirmed the finding of renowned political analyst “Paul Collier” who
uncovered that for any given five-year period, the chances of civil war in Africa’s resourcerich nations is at about 25 percent whereas for the non-resource rich nations is at about 1
percent (Iimi, 2007).
Weaker Institutional Development
It is discovered that most resource rich nations are having weak institution where the elites
or leaders usually take large sums of cash (Deacon and Rode, 2012). Many studies backed
this claim with reports that most countries with single fat point of resource rent such as oil55and other precious mineral resources are prone to be captured by powerful group of elites(Bulte et al., 2005; Arezki and Brückner, 2011; Arezki and Nabli, 2012; Bhattacharyya andCollier, 2014). This theory accounted that key national tools or machineries such as thenational companies and sovereign wealth funds are easily captured by these powerful elites
and ruling class (Bhattacharyya and Collier, 2014). Consequently, in most of theseresource rich countries in Africa, Asia and South America, the elites and the ruling classare less likely to invest the national wealth in productive enterprises and create jobs but
instead uses this wealth to pursue their respective plea for power and control (Arezki and
Nabli, 2012; Bhattacharyya and Collier, 2014). This study believed that in some cases, theelites purposely employed the model of “rent seizing” through deliberately creating newer
regulations to dismantled the societal checks to grant their family and friends easy accessto national revenues and control of power. Moreover, studies by Bulte et al. (2005) and De
Rosa and Iootty (2012) confirmed this claim by both agreeing that the elites focuses on
badly dispossess institutional development and consequently promote corruption throughrent-seizing and rent-seeking.
Prevalence of Corruption and Despicable Institutional Quality
Numerous studies have demonstrated beyond reasonable doubt that resource rents arethought to bring not only conflicts but also corruption, and also further reduce demand on
institutional quality (Hodler, 2006; Iimi, 2007). Hence, this claim was countered by aprominent study by Brunnschweiler and Bulte (2008) which argued that institutions do notplay any significant contribution to the character of resource curse effects. However, more
recent study by Arezki and Brückner (2011) affirmed earlier studies of Atkinson and
Hamilton (2003), Hodler (2006) and Iimi (2007) which proved resource rents have corrosive
effects on the quality of a country’s institutions as well as its’ economic prosperity. Even
though the study by Arezki and Brückner (2011) only examined the effects of oil rent on
corruption and state stability for a panel of 31 oil-exporting countries between 1992 and2005, the study uncovered that major oil producing nations significantly increases a“Political Risk Services” sourced corruption scores. Bhattacharyya and Hodler (2010) also
argued that natural resources only induce corruption in countries with long-term nondemocratic regimes. Another study by Arezki and Galyfason (2011) conducted by a panelof 29 sub-Saharan countries agreed with concept of resource curse through distinction of
democratic system. This study like many other studies expresses a contrary view to theabove perspective through downplaying these acts as a go-between the role of institutions
in resource curse propositions. Hence, it is paramount to acknowledged that various
studies have established that it is the quality of institutions that decides whether resource
rents can lead to resource curse or blessing state of affairs (Mehlum et al., 2006; Beck,2011; Sarmidi et al., 2014).
Oppressive Democratic Regimes
For the past three decades, natural resources rent and revenues have rendered mostresource rich nations (especially the oil-rich economies) more exposed to dictatorial system(Apergis and Payne, 2014). This study found that various studies have repeatedly
demonstrated that a country with resorted collection of large revenues of natural resource
rents usually tend to be less likely dependent on levying taxes on citizens, as a result, thecitizens felt redundant and ignored (Bevan et al., 1999; Barma et al., 2012; Apergis andPayne, 2014). Moreover, it is also discovered that some studies have proven that theseresource rich countries usually resorted to keeping resources rents and revenues secret
where the citizens do not have clear picture of regime spending acquaintances (Arezki andGylfason, 2011; Barma et al., 2012; Apergis et al., 2014). Two examples of resource richcountries best and worst performance are; the Botswana is democratically stable while
Congo is an example of the worst. Though, this study realized that the tendency of sliding
toward authoritarianism can be mitigated by increasing transparency of resource rents andrevenues through strengthening the links between the government and their respective
citizens; notably countries such as Angola, Syria, Algeria, Venezuela and Saudi Arabia as
great examples. But, the majority of non-resource-rich nations that relied on citizens’
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taxation are more responsive to their citizens’ welfare and also more likely to prosper underdemocratic regimes, for instance, India and Malaysia.
Recurrent Violent Conflict and Uprising
It is commonly anticipated that natural resources often incite internal conflict through quest
for gaining common control of the resource rents by different relevant groups (Ross, 2007).
However, this study found that since 1990s, most oil-producing nations were mostly
anticipated to be having twice likelihood of civil war and unrest as compared to the non-oil
nations (Ross, 2007; Arezki and Nabli, 2012). Moreover, an examples of this scenario canbe seen in Nigeria’s case of the Niger-Delta militants and Republic Biafra agitation by Igbo
ethnic group of the South Eastern part, other examples are the case of Democratic Republicof Congo, Angola, Iraq and Libya (Ross, 2007; Humphreys et al., 2007; Arezki and Nabli,
2012; Apergis et al., 2014). However, this study further discovered that some key studies
linked the recent violent conflicts and uprising in most resource rich countries to a politicalthought known as petro-aggression. This concept is defined as a tendency of oil-richnations be instigated or targeted by international conflict; for instance, this scenario is thecase of Iraq invasion of Iran and Kuwait (Karl, 2005; Humphreys et al., 2007; Boyce andHerbert, 2011; James, 2015).
Patriarchy and Gender Challenges
It is evidently clear that most resource rich nations have not been favoring women asreported in various studies among the oil rich countries (Humphreys et al., 2007; Ross,
2012; Bauer and Quiroz, 2013).Moreover, this study understood that most of oil-rich nations
usually have lesser women in the workforce and undersized representation in the public
enterprises as compared to countries without natural resources, therefore, most of theindustries (explicitly the export-oriented manufacturing industries) are usually easier for
women to enter, and hence they are less likely to succeed. According to some prominent
studies by Sachs (2007) and Ross (2012), the life of a woman in natural resource-richcountries is threatened by adverse diseases such as HIV and AIDS, early pregnancy,higher school dropout as compared to their male counterparts, etc. Moreover, this study
further affirmed the believed that the influx of men into resource-rich region to be associatedwith increasing marginalization of women in most of industries and agencies (Ross, 2012).
Prevalence of Environmental shared Challenges
In most of the resource-rich countries, the main points of extracting key precious resources
mostly create numerous challenges that have adverse negative impacts on immediateuser-groups and the environment (Apergis et al., 2014). This study is in agreement with
Arezki and Brückner (2011) study that reported the sharing of common natural resources
such as land and water around key natural resource points are believed to be having potent
capabilities of becoming the hotspots of violent conflicts among key competing user-groupscompeting for access (Arezki and Brückner, 2011; Hassan et al., 2018). Moreover, thestudy further believed that environmental shared challenges aggravates conflicts between
the resource extracting firm and relative communities through issues of compensations fordamages caused to the communities’ sources of livelihood. The resource extraction sites
usually attract hefty immigration of people, even when additional employment is notnecessarily available. Moreover, this setting of affairs eventually causes stress onsocioeconomic and infrastructural facilities, and hence, a series of compoundedenvironmental issues such as pollution (water and land), massive use of water, seismic
disturbances, gas flaring, several political and economic problems possess predispositionof violation of human rights and abuse of power (Badeeb et al., 2016).
Lessons from Nigeria
Been an intrinsic problem associated with countries that are endowed with natural
resource, resource curse was believed to be the reason for Nigeria’s disastrous
development experience. Since independence, Nigeria was perceived to be lagging behindin most of the conceivable metrics associated with both economic as well as political57

mechanisms. For instance, some of the economic mechanisms are the reason for thecountry retarded PPP terms; per capita GDP in 1970s was about $ 1,113 is still about $2,084 as of 2000 (Adedipe, 2004). Interestingly, the latter automatically ranked Nigeria
among the 15 poorest nations in the world, and have depicted the share of poor people
within the country’s population from about $19,000,000 (1970) to about $90,000,000 (2000)(Adedipe, 2004; Ajakaiye and Fakiyesi, 2009). This country has experience growth rate
volatility that can be categorized worse than average country, however, the growth rate
was found to be more than most oil producing countries.
Nigeria in relation to other countries (oil producing countries inclusive), the country’s
economy is considerably volatile as reflected by the country’s standard deviation andcoefficient of variation of growth rate (Ajakaiye and Fakiyesi, 2009). The discovery oil in
Nigeria is the beginning of new dawn that have replenishes the country with cumulative oilrent of about $350,000,000,000 for the period of only 35 years (Ajakaiye and Fakiyesi,2009). However, this revenue adds only little or no value because the Nigeria’s oil revenue
per capita was about $325 with per capita GDP of about $245, notably, the country oilrevenue of 1965 is about $33 per capita with almost the same per capita GDP (Adedipe,2004; Ajakaiye and Fakiyesi, 2009). Even though oil rents and revenues as a share of GDP
declined in the country, this is as a result of the rapid expansion of GDP than growth in both
oil and the real appreciation of the currency, yet US dollar value of oil revenues certainly
increases globally, but the dollar value of Nigerian GDP grows even at faster rate (Adedipe,2004).
In 2018, the world oil demand is reviewed downward at 1.54 mb/d growth to average
98.79 mb/d, hence, the global oil consumption in 2019 is believed to be slightly lower thanprojected rate. The forecasted consumption rate in Organization for Economic Cooperation and Development (OECD) was believed to have further dropped largely becauseof the decrease in demands in most part of Europe and Asia. Historically, Nigeria’s oil sector
is believed to be facing diverse problems ranging from low production capacity of thecountry’s refineries, fuel importation and smuggling, corruption, pipeline vandalisms tokidnapping of oil workers (Adubi and Okunmadewa, 1999). However, during the last recent
decade, Nigeria has significantly made progresses towards effectively managing some its
economic and fiscal oil rents. But the country still needs to address some key politicalmechanisms like the institutional weaknesses. Though, international experience in oil
dependent countries suggests that countercyclical fiscal policy is a key to conquering the“oil curse” of periodic instability and slow development. In this regard, Nigeria made a giant
step forward during 2004 to 2009 through the establishment of the Excess Crude Account(ECA) fiscal reserve that successfully insulated the country from the sharp swings in oil
prices during this period (Adebile and Amusan, 2011).
But the year 2010 have revealed the remaining weaknesses in the institutionalframework for macroeconomic management. Hence, an instance of macroeconomic trends
in management during 2011/2012 has been quite positive, and under this fiscal expansion;
naira came under pressure and investor sentiment toward Nigeria became more cautious.
Despite its customary economic volatility, the COVID-19 pandemic has severely shattered
the Nigeria’s economy. This pandemic has led to shock reduction of global oil demand
which were associated with diverse lockdown imposed around the world as a preventive
measure of containing the spread of the virus. Nonetheless, in the absence of an oil priceshock, Nigeria’s short term macroeconomic outlook looks generally strong. The foreign
inflows and balance of payments surplus should continue at the existing exchange rate,
however, the continuing trend of slow output growth in the country’s oil sector andbudgetary circumstances must remained tight in addition to being in line with real state ofaffairs. Nevertheless, this study believed that both Federal and State Governments canreimburse the falling oil rents and revenues relative to the size of the economy through thedevelopment of the domestic tax system and internally generated revenue.

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Conclusion
In conclusion, this study discovered that it is evidently clear that quite few resource richnations have been doing well in terms of human, economic as well as infrastructuraldevelopment. However, most of these resource rich countries are found to be performing
poorly on almost all aspects of human, economic and infrastructural developments (Sachs
and Warner, 1997; Iimi, 2007; Adebile and Amusan, 2011; Ross, 2012; Bauer and Quiroz,
2013; Badeeb et al., 2016). In fact, the past decades have seen a raft of international
initiatives designed to combat corruption and improve governance in resource rich nations;for instance, the Asia-Pacific anti-corruption strategy developed by fourteen countries inthese regions. Though, a recent consensus is emerging on political variables on nexus
between the natural resource wealth and development outcomes, however, the overcomingof resource curse in modern universal arena required a comprehensive indulgence ofvarieties of social feasibility issues. It was further understood that a number of studies areasking the wrong questions; for example, asking why natural resource wealth has fosteredvarious political ideologies which in turn stagnated regional growths and developments?
Moreover, others also tend to be asking for the sociopolitical factors that enabled resourcerich countries to efficiently utilize their respective resources rent efficiently besides thepromotion of regional development. Lastly, with current scenario, this study affirmed theessential need for more studies regarding the effects of resource curse at country level,
since the scenario is closely affiliated with the decision of relevant political elites and rulingclass. This study affirmed the need for an inclusive user-group participatory planning andbudgeting that can strengthen the inter-relationship between government agencies andcitizens in managing of regional natural resources rents and revenues.
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