Sample Answer for Economic development in LICs/NEEs [9 marks]

An example of a transnational corporation is Shell, which operates oil extraction in Nigeria, particularly in the Niger Delta, where there are significant oil reserves. Shell has created 65,000 permanent jobs in Nigeria and an additional 250,000 jobs in related industries. This has triggered the multiplier effect, as these workers spend money on services and in shops, creating a cycle of economic growth. This cycle, known as the multiplier effect, has effectively increased the GNI of the country. Additionally, 91% of Shell's oil contracts have been awarded to Nigerian companies, contributing to reducing the development gap.

However, Shell's operations have caused numerous environmental and noise issues in Nigeria, including frequent oil spills and flaring. Oil spills have destroyed many fishing areas that local communities depend on for their livelihoods. This has exacerbated inequality, increasing the gap between the rich and poor and fostering corruption.

The wealth generated by Shell has also sparked controversy over mismanagement and the disappearance of funds, with gangs stealing oil for their own gain, which does not benefit ordinary, hardworking Nigerians. The host country is not the only one to benefit, as countries like England and the Netherlands have also profited from success in the Niger Delta. This success has made Nigeria an attractive prospect for international investors, such as Chinese companies involved in construction projects that are boosting wealth in areas like Abya and creating new jobs.