Misfortunes Of The Oil Era – The Nigerian Experience | Independent Newspapers Limited
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Misfortunes Of The Oil Era – The Nigerian Experience

Adenwumi Oni
Posted: Jun 16, 2016 at 2:00 am   /   by   /   comments (0)

By Adewumi Oni

When Shell-BP struck oil in Oloibiri in 1956, little did anyone know that we had struck what will become a blessing and a curse for the nation. Nigeria was predominantly known as an Agrarian country before the discovery of Oil in Nigeria. As a matter of fact, we were among the major exporters of cash crops in the entire African continent, exporting Cocoa, Rubber, Palm Oil, Groundnut and a host of others. A major portion of our GDP was accounted for, by proceeds from Agricultural produce. We were well on our way to becoming a great nation. Our potentials were great and our colonial masters saw this and kept close watch on Nigeria.

Alas, we struck oil and things fell apart! Nothing else mattered to the Nigerian government than the price of oil in the global market, daily production and the sharing of the revenue. It was as if the country was under a spell, as all other sectors were practically abandoned.

Unfortunately, we woke up from our deep sleep in 2015 when global oil price began to nosedive from almost a $100 per barrel to an all-time low of $38 per barrel in late 2015. The spell has worn off and now it is all about diversification of the economy. Now to the crux of the matter, are there lessons we can pick from the Nigerian experience for our personal and collective advantages. Sure there are. Here are some of the lessons:

First, nothing lasts forever. Wealth doesn’t last forever, especially if it is poorly managed. Yes there are a few generational wealthy families left in the world, but these are the exceptions. When you run into a boom, don’t expect it to last forever. Like Joseph advised King Pharaoh in the Biblical days, stores were created to warehouse what will be needed by Egypt and the rest of the world in the seven years of famine that was to follow the seven years of plenty. Our government must never allow the country go through what we are going through today again. We must save during the rainy season. It was Dr Oby Ezekwesili that said, if Nigerian government had been saving since the days of excess crude oil revenue, we would have close to $90 billion in our foreign reserves. I think we should have more than that going by the recently released recovered loots report.

Second, a mono-economy is a dangerous economy. Having a single source of income is a sure recipe for disaster. Beyond Agriculture, we can create income streams from tourism, entertainment industry, hospitality industry, art and craft industry, in addition to tax revenue. There should be conscious and concerted efforts by government at all levels to create multiple streams of income from what we have. It is time to put on our thinking caps.

Thirdly, you must take care of the goose laying your golden eggs. We must pay adequate attention to our sources of income to enhance their capacities. As a nation, we have long neglected the region where the bulk of the wealth of the nation is being generated.

Fourthly, don’t raise children that are perpetually tied to your aprons. For long, our State Governors have become so used to planning on federal allocation to the extent that they can’t come up with any creative idea on how to raise their Internally Generated Revenue (IGR). One of the herculean tasks the present administration had to face on assuming office, was to bail out many of the states. Yet less than a year after, some of them appear in need of another bailout! Now that the Federal Government herself requires urgent bailout, who is going to bailout the states?

In conclusion, now that the hen has come home to roost, what do we do? The world doesn’t need as much oil as we can sell, thereby causing drop in global oil price. So how do we rapidly turn our economy from a monolithic one to a diversified one? Finding answers to this question and doing so fast enough is a major priority of this current administration. One only prays they get it right.