Our Over-dependence on Oil, Our Achilles‘ heel (Part 2) -By Abdulsalam Jubril

Abdulsalam Jubril

From the recent oil-exploration team sent by the NNPC to the Lake-Chad Basin, it is obvious that the government is not thinking of diversifying the economy. They have seemingly resorted to relying solely on crude oil. The exploration team that was sent to the region despite the pervasive insecurity in the area buttresses this. It is quite unfortunate that Boko Haram insurgents abducted members of the team. A video of their rescue plea has been featuring prominently in many traditional and social media outlet.
This is coming at a time when oil prices have drastically fallen and other countries are finding alternative to oil. France, the UK and a whole lot of countries for instance has recently stated that they will ban petrol and diesel powered cars and vans by 2040, relying solely on electric cars. The US has reduced its dependence on Nigeria’s oil with the discovery of its shale oil. NEITI has also recently stated that the crude in Nigeria is finite. In other words, the resource is limited and bound to be exhausted in the nearest future.

With these current realities, Nigeria seems to be unconcerned. We seem to be in denial that we might eventually literally begin to drink our oil. Those at the helm of affairs have consistently refused to think outside the box and come up with other resource or sectors than can adequately grow the economy. The ruling elites seem to be contented with the proceeds gotten from oil which they mostly use to enrich themselves.

Since oil was discovered in commercial quantities during the 1950s and the oil boom of the 70s, oil has been the mainstay of our economy; accounting for over 90% of exports and over 80% of total government revenues. However, proceeds from this resource haven’t necessarily translated to neither growth nor development. Instead, it has fuelled corruption, malfeasance, strive, over-bloated public sector, financial indiscipline, lack of accountability, conflict, civil war, greed and a whole lot of vices that has led the country to a retrogressive state.

Unsurprisingly, the crude oil that we overly rely upon isn’t even refined in the country, since we’ve become a country that imports what it can produce and exports what it does not produce. More than 90% of it is refined outside our shores and imported back to the country. Apparently like many other infrastructures in the country, our refineries have become obsolete relics meant to be showcased in museums. We have also been loosing out in the over 10 other commodities that can be gotten from crude when refined. Since the ruling political and economic elites are benefiting from this lopsided arrangement; the status-quo has remained the same.

Our over-dependence on oil has also exposed us to the vagaries associated with oil price volatility which has thrown the country’s public finance into disarray. Since oil revenue dominates the Federation account, the sharing of oil rents dominates intergovernmental fiscal relations in the country with ongoing tensions between agitations by oil producing states for greater share of resources and demands for redistributions from other regions.

Our over-dependence on oil has essentially made our economy dysfunctional and led to several adverse vagaries since independence. Crude oil was not unconnected to one of the underlying causes of the Biafra Civil War. Crude oil led to the abandonment of agriculture and disappearance of the famous groundnut pyramids. Crude oil led to the abandonment of Cocoa exportation that was used to develop the former Western Region. Crude oil wasn’t unconnected to the military’s continued stay in power and isn’t unconnected to the current IPOB secession calls.

Much has been said about diversifying to agriculture but no tangible development has been recorded in the sector. Other than the much publicized export of yams which has made local purchase very expensive and the banning of foreign rise, the agriculture sector is literally in comatose. Much has also been said of industrialization. However, without power we will just be paying lip-service to this vital sector of the economy.

What has been happening thus far is that proceeds from oil sales are used to pay salaries of the over bloated civil service/public sector, spent on the extravagant upkeep and jumbo allowances of our legislators and their retinue of aides, shared to governors in the name of federal allocations and used to line the pocket of many in power as well as those in the corridors of power. With the way successive government and the current administration is carrying on without any concrete plan to turn our attention away from oil, future generations might just pay dearly for it.

Written by Abdulsalam Jubril
You can follow me on Twitter via @Abdul_Jubril