Cheap oil wealth

FADE Uncategorized, Weekly Column Tags: , , , , , ,

 

The oil came to us cheap and caught us completely unprepared. We didn’t expect it, so we didn’t prepare for it and then became wholly incapable of managing it. Soon after the oil came, we started slowing down on agriculture, manufacturing and expanding our industries. Oil was our newfound love and we had eyes only for it, everything else faded from our line of sight. We discovered oil in 1958 and it has since the early 1970s dominated the economy. Today, Nigeria is the largest oil producer in sub-Saharan Africa and, since 1971, a member of OPEC (Organisation of the Petroleum Exporting Countries), with an estimated production volume of 2.413 million barrel a day, as at 2005. This makes it the world’s sixth largest producer.

The political structure that was established between the colonial government and our founding fathers and mothers was disbanded or suspended to be replaced with coups, wars and massive corruption. We started dividing the nation because of oil and Nigeria has never been the same ever since. This once lush and green nation has become so divided militarily, politically and structurally. The constitution we uphold is not acceptable to many Nigerians because of the marginalisation that the emergence of oil encouraged. The young intellects, thinkers, scientist, inventors and teachers stopped thinking because everyone’s success story could be found in the oil industry. International financial institutions started lending us money we didn’t need or know how to manage because we had the oil they wanted. And, of course, with everything that is cheap or stolen by many, sharing became a big problem. This became our Nigerian problem – an unacceptable sharing formula – and appears it will remain with us for a very long time.

As mentioned above, Nigeria is in the top 10 list of the world’ largest producers of oil, yet, with its estimated current population of 200 million, ranks top as the nation with the world’s highest number of poor people, just over 91 million – higher than former reigning champion, India, whose total population of 1.3 billion more than triples Nigeria’s.

Low human development level, social conflicts and environmental degradation are just a few problems that chararterise the current state of development in Nigeria. The question to be asked is: why is a country that is so highly endowed with one of the most valuable resources fared disproportionally badly in economic and social terms?

For over 40 years, we have talked about diversifying the economy so that we can rely less on oil revenue but have achieved very little progress. Many countries that were equally blessed or punished with oil (depending on how it was used) about the same time with Nigeria have not only taken their population out of poverty, many have gone from underdevelopment to developing nations. In addition, some of these countries are making 40 to 50 years development plans for when oil will become a non-issue; some have already made and keep making huge investments in tourism, sports, arts and culture – sectors that can continue to boost the economy devoid of oil revenue.

I would like to reference an old article where I commended the former governor of Delta State, Emmanuel Eweta Uduaghan, who coined the phrase “Delta without oil” in a state that is the highest oil-producing area in the country. Even though the campaign didn’t result in the expected outcome, the phrase remained with me and in the process inspired me to write more about it in an article I entitled: “Nigeria without oil.” In that article, I told a story that I will repeat, and it goes thus:

Sometime ago, in a dinner event that I was privileged to have attended in honour of the Rwandan President, Paul Kagame, the host, Ambassador Dele Cole, in an opening speech, mentioned how oil has been a curse to Nigeria. The Rwandan President who was at this time looking into the possibility of oil exploration in his country reacted to this opening speech by saying if oil was a curse, then he would like to have the curse in his country.

We all laughed at his joke but the implication was clear. Our oil was wasted on us because of poor management and greed. A country like Japan that never had oil and didn’t play rugby 20 years ago brought the Rugby World Cup to Japan for a whole month and injected billions of dollars into the economy, which thrilled the people of Japan and the global community. China did the same many years ago with the Olympics; now, the Gulf nations are doing same with the FIFA World Cup, motor racing and cricket. Nigeria played most of these games many years ago but somehow we tend to underestimate what simple things like this can do for the development and unity of a nation. These innovations take between 20 to 30 years to realise. A case in point was how, under 60 years ago, David Ben-Gurion, known as the father of Israel, took thousands of Jews to the Negev desert and founded the State of Israel and built what is today a thriving nation politically, economically and militarily.

In our own continent of Africa, the Sahara desert is taking over the land space from one-fifth in the 1970s to one-third as of today. You cannot move goods and services from North to South and from East to West because of the Sahara. The continent of Africa is the only continent in the world where you cannot make such movements. If Nigeria must survive the next 50 years, we must begin to confront and accept the inevitable. That is:

• Crude oil price may drop to $30 per barrel.

• Demand for crude oil may also drop to about 40% because of climate change-related protocols like renewable energy, clean air energy and reduction of fossil fuel.

• Insurgence may also be on the rise, which will affect production and distribution.

• Most things that depend almost solely on oil money may go into extinction.

With all these in my mind, I am reminded of the scripture I encountered over 70 years ago in the Bible from the book of Matthew chapter 25 verses 14 – 30 about the parable of the bags of gold. It was told that a certain man going on a journey called his servants and entrusted them with his wealth. “To one, he gave five bags of gold, to another two bags, and to another one bag, each according to his ability. Then he went on his journey.” We are told that, after a long time, the master of those servants returned and settled accounts with them. The man who had received five bags of gold brought an additional five. “Master,” he said, “you entrusted me with five bags of gold. See, I have gained five more.” The man with two bags of gold also doubled his as well. It was then down to the one that was given a bag. “Master,” he said, “I knew that you are a hard man, harvesting where you have not sown and gathering where you have not scattered seed. So, I was afraid and went out and hid your gold in the ground. See, here is what belongs to you.”

The master was upset and took the bag of gold from him and gave it to the one that now had 10. He said in verse 29, “… For whoever has will be given more and they will have abundance. Whoever does not have, even what they have will be taken from them.”

Nigeria is like the servant with one bag of gold and its oil is the gold. Let’s hope what we have and haven’t used wisely won’ be taken away from us and given to others more deserving.

From all of us at Fight Against Desert Encroachment (FADE) Africa, we wish you merry Christmas and a prosperous New Year.

Leave a Reply

Your email address will not be published. Required fields are marked *