Nigeria is blessed with crude oil which it heavily depends on. Nigeria’s crude oil accounts for over 95 per cent of export earnings and about 40 per cent of government revenues. Nigeria is ranked as the 11th largest oil producer in the world and it produces about 2 million barrels of oil per year. Nigeria is Africa’s largest oil producer and has been a member of the Organization of Petroleum Exporting Countries (OPEC) since 1971.
There is a towering sense one gets these days; some kind of a mountain view outlook when one reflects on the true impact crude oil has had on the Nigerian economy and this doesn’t come with a sense of pride but rather some kind of vantage point of view that gives one a sense of the true picture; unfortunately monstrous in this case.
By now in 2021, it is expected that Nigeria should have made the G-20 country list; Vision 2020, but it is quite unfortunate where Nigeria stands today. Crude oil is Nigeria’s major source of income and this supposed resource of national transformation has contributed to the woes of the nation. The saddest part of this narrative is that this is 2021 and it’s been more than half a century since this “black gold” was discovered in Oloibiri Bayelsa State yet, the national scorecard is sobering. Perhaps, this natural resource possesses an inherent “black” character to torment the nation and it truly has. Nigeria’s trust in its oil is serving as a stumbling block in its quest of becoming a developed country.
In Nigeria today, there are daily nightmares from Sarowiwa. Vessels are attacked by pirates in the gulf of guinea, issues of pipeline vandalism, kidnapping, militants’ takeover of equipments and the pandemic have lowered oil prices. Even several economic development plans by the military junta could not save Nigeria from the power of this curse.
There is no doubt that Nigeria’s crude oil has immensely contributed in its growth and development even with the existence of moribund refineries. Jobs were created in the downstream sector. Retail of petroleum products by independent marketers have created jobs for tanker drivers, pump attendants, sales executives but sadly, it employs only a small part of the populace.
MAMSER by IBB, Vision 2010 by Abacha in 1996 and even vision 2020 by a democratic republic have all failed. When will Nigeria awake? When will Nigeria realize that this is 2021 and not a good year for oil? The Nigerian government seems to have a deep affection for this black gold while European countries like China and America are seeking green solutions as better alternatives to the energy mix and Nigeria can do the same.
The sum of $ 1.5 billion dollars has been recently approved by the Federal Executive council to fix the moribund refinery. If these billions of dollars were injected into agriculture and solid minerals among other sectors, it will go a long way to open alternative sources of forex for Nigeria but it seems Nigeria loves its curse: the black gold with her dark luster of underdevelopment.
Even though there are investments and advancements in diverse sectors of the Nigerian economy, there is no doubt that Nigeria’s overdependence on crude oil surpasses its faith in the growth and development of other aspects of the economy. This over reliance on crude oil by the Nigerian government has led to a rapid fall on the general standard of living. For the Nigerian economy to blossom and grasp the height of other developed countries, the government must heavily work on the diversification of the economy.
The government of Nigeria must focus on key sectors like agriculture, transportation, health care, banking and finance, technology, infrastructure among others. The development of this key sectors requires adequate funding, strategic maximization and making of projections. The federal government should work with the states and local governments to help implement its programs. Once these key areas are developed, it will attract local and foreign investors.
It is obvious that money from the federal government’s account of Nigeria is no longer enough for all the states in the country. State governments must therefore device productive means that will aid them generate revenue and ease their reliance on the federal government. The tax systems should be well developed and strengthened and once an increase in revenue is detected, the income should be used to sponsor or develop other national projects.
The Nigerian government should partner with international bodies to facilitate export promotion, technology transfer, investment and other forms of economic cooperation. The federal government should also collaborate with the private sectors and simplify the regulations attached to setting up businesses in the country. The government should not cease in its quest to eradicate corruption because once the rate of corruption is drastically reduced, the effective results of economic diversification will sprout.
The government should also provide flexible and core infrastructures so as to support the industrial sector. Security and political stability will increase industrial growth and boost the entire Nigerian economy. For instance, countries like Tanzania and Monaco provide serene environments that attract investors which increase their industrial growth rate. Nigeria too can do the same.
There are speculations that Nigeria has 237 years of oil left hence the need to pursue the quest for effective diversification of the economy for the earlier the pursuit for the diversification of the economy, the more advanced the country will be. Once the Nigerian economy is diversified and key sectors are developed, the reliance on crude oil will drastically reduce and even if the oil gets all used up in a few centuries to come, there will be other sectors that will generate revenue and export earnings for the country.
Saduwo Banyawa writes from Borno State