Key Terms You Must Know

📖 Key Terms You Must Know

NEE (Newly Emerging Economy)

A country that has recently begun to experience higher rates of economic development and rapid industrialisation. NEEs typically have growing manufacturing and service sectors, increasing exports, rising incomes and an expanding middle class — but also significant inequality and uneven development. Nigeria, India, China and Brazil are all NEEs, though at different stages.

TNC (Transnational Corporation)

A large company that operates in more than one country, with its headquarters typically in a high-income country and operations in lower-income countries. Shell (UK/Netherlands), Chevron (USA) and Total (France) are all TNCs operating in Nigeria. They bring investment, jobs and technology but also extract profits and can cause environmental damage.

FDI (Foreign Direct Investment)

When a company or government in one country invests money directly into businesses or assets in another country. Shell's investment in Nigerian oil infrastructure is FDI. FDI can fund development but also creates dependency on foreign companies.

HDI (Human Development Index)

A combined measure of a country's development that includes income (GNI per capita), health (life expectancy at birth) and education (years of schooling). Ranges from 0 (worst) to 1 (best). Nigeria scores 0.560 (2023), reflecting that income growth has not translated proportionately into better health and education.

GNI (Gross National Income) per capita

The total income earned by a country's residents (including from abroad) divided by the population. Different from GDP, which measures only production within a country's borders. GNI per capita is the income measure used in the HDI calculation.

Gini coefficient

A statistical measure of income inequality, ranging from 0 (perfect equality — everyone earns the same) to 100 (maximum inequality — one person earns everything). Nigeria's Gini of approximately 35–40 indicates significant inequality, reflecting the concentration of oil wealth among a small elite.

Informal economy

Economic activity that is not regulated, taxed or monitored by the government. Street traders, informal mechanics, domestic workers and small agricultural producers operating outside formal contracts are all part of the informal economy. In Nigeria, the informal economy employs around 65% of the workforce — mostly in cities like Lagos where many migrants work in the informal sector.

Remittances

Money sent by migrants working abroad back to their families in their home country. Nigeria is one of the top recipients of remittances in Africa — Nigerians living in the UK, USA and other countries send billions of dollars home annually, which supports families and supplements low local wages.

Profit repatriation

When a TNC takes the profits it has earned in a host country back to its home country, rather than reinvesting them locally. Shell and other oil TNCs in Nigeria repatriate large shares of their profits to their headquarters in Europe and the USA. This reduces the long-term development benefit that Nigeria receives from its own natural resources.