Find Your Feet, Nigeria
by Oladayo Falode
FIND YOUR FEET, NIGERIA!
SUPPOSE AN ENVIRONMENTALLY-FRIENDLY MINERAL IS DISCOVERED IN PLACE OF CRUDE OIL IN THE WORLD?
Agriculture accounts for 23 percent of Nigeria’s GDP and involves 3 percent of the economically active population. Agriculture contributed more than 75 percent of export earnings before 1970. Since 1970, agriculture has remain stagnant, partly due to government neglect and poor investment, and partly due to ecological factors such as drought, disease, and reduction in soil fertility. By the mid-1990s, agriculture’s share of exports had declined to less than 5 percent, due to the neglect.
The discovery of crude oil gave rise to a great boost in the economy of Nigeria, because the country was able to sell her crude oil to the other countries by means of export in the global economy. This exportation enabled the country to earn foreign currencies which helps in the development of the economy.
The crude oil from Nigeria (Bonny Light Crude Oil) happens to be one of the best quality oil in the world due to its low sulphur content. This feature in the Nigeria crude oil made the demand for the nation’s crude oil increase across the globe. Nigeria’s economic progress continued to be dominated by the remarkable oil boom the country enjoyed in the past years. Revenues generated from oil rose from £4.4 million in 1960 to £489 million in 1971, when they accounted for 73 percent of export earnings. Income from oil was expected to contribute £500 million to Nigeria’s total estimated federal revenues of £650 million in 1972-1973. The economy as a whole registered a highly satisfactory growth rate of 9.6 percent during 1971-1972.
This made the federal government of Nigeria form policies that favoured the oil sector in order to experience more economic growth. The bias towards the oil sector at the expense of other sectors led to its emergence as s the sector to become the country’s leading sector with all other sectors as subordinates in the economy. This massive dependence of the country’s economy on the oil sector made the economic growth of the country subject to the different policies of this leading sector. The implication of this statement is that “as the leading sector grows, so also will the country’s economy grow”, all things been equal.
The removal of the subsidy on the Premium Motor Spirit (petrol) on the first day of the first month in the year 2012, gave rise to various reactions by concerned Nigerians from various quarters. These reactions which led to “operation total paralysis” in the country for a week , were largely supported by the generality of Nigerians — especially the masses who bore the brunt of this policy. The subsidy removal from petrol had both direct and indirect effects on the nation’s economy, as the prices of all the goods and services rose up without a corresponding increase in the per capita income of the citizens.
Reduction in the standard of living of families became the order of the day in the country because it is expected of a reasonable person to cut his/her coat according to his/her cloak. These reductions vary from one family to the other because our fingers of are not equal, therefore the subsidy removal had a disproportionate effect on the poor masses.
According to the publication by the Subsidy Reinvestment and Empowerment Programme (SURE), “The federal government of Nigeria is therefore desirous of discontinuing subsidies on price of petroleum products because this poses a huge financial burden on the government, disproportionately benefits the wealthy, is inefficient and diverts resources away from the potential investment in critical infrastructure”. “The total projected subsidy reinvestible fund per annum is N1.134 trillion based on average crude oil price of USS90 per barrel. Out of this, N478.49 billion accrues to Federal Government, N411.03 billion to state governments, N203.23 billion to local governments, N9.86 billion to the Federal Capital Territory and N31.37 billion as Transfer to Derivation and Ecology, Development of Natural Resources and Stabilization of Funds”. “Critical infrastructure projects in the power, roads, transportation water and downstream petroleum sector will be executed, in order to transform the economy in line with the vision 20:2020”.
The SURE publication gave the citizens an idea of what to expect in the country in terms of economic development due to the money accrued from the subsidy removal. Therefore, based on these promises the hope of the generality of the populace is very high and people are expectant.
The question asked at this juncture is: what will happen if the world discover an environmental friendly substitute in place of crude oil?
Suppose the first news Nigerians hear on their radio and television set tomorrow morning is that “an environmentally-friendly mineral has been discovered in place of crude oil”, will this news bode well for Nigeria’s economy?
The news will definitely not be good news for our country because Nigeria’s economy greatly depends on the revenue generated from the oil sector. This will automatically lead to a sharp downturn of the country’s economy. This single discovery will render the SURE’s proposal useless, and the nation’s effort to attain the economic goals of the vision 2020 will be a futile one.
The security and sustainability of food would no longer be guaranteed because of the great fall in the GDP and GNP of the country. The security of lives and properties of the citizens would no longer be guaranteed because of the reduction in budget on those areas. This situation can also lead to great strife and possibly the mass emigration of citizens, in search of a greener pastures. This single action can make the country very vulnerable and prone to external aggression and manipulation by developed countries, which can give rise to exploitation on the long run.
The discovery of this substitute can increase the country’s dependency on other countries that had earlier prepared for this, by not solely depending on the oil sector.
The above are some of the effects this discovery of the environmental friendly substitute in place of crude oil will have on Nigeria economy, just to mention of a few.
Nigeria’s Potential in Building and Diversifying her Economy: Curing Nigeria of the Dutch Disease
Nigeria as a country has an abundance of resources to transform the country’s economy to one of the greatest and most sustainable economies in the world. Some of which are:
- The country has an average of 923,768 sq km of land which can be easily exploited for the development of the economy. This large expanse of land can be used for commercial agricultural purposes leading to an increase in national revenue and tackling the problem of unemployment.
- Exploration of the water bodies, dredging of the seas and river to aid smooth transportation that will encourage international trade.
- Promotion of small and medium scale enterprises
- The promotion of our culture through tourism will actually add to the GDP and GNP of the nation because of the revenue that will be generated from this enterprise.
- Industrialization should be encouraged. More industries should be established so as to diversify the economy
- Building of good road networks to aid transportation of goods and services.
The successful exploration of these sectors just to mention of a few and their combination to the leading sector of the Nigeria economy (oil sector), will enable the country to stand shoulder to shoulder with other developed countries of the world in terms of the strength and sustainability of the economy, even if an environmental friendly substitute is discovered in place of crude oil in the world.
FIND YOUR FEET, NIGERIA! TOGETHER WE CAN RULE THE WORLD ECONOMY.
Oladayo Falode is a Harambe Farmland blogger and one of the 2011-2012 Fellows at the Haramabe Incubator for Sustainable and Rural Development. He is also a student of agricultural extension and rural development at the Obafemi Awolowo University, Ile-Ife in Osun State.