Unhealthy Economic Diet: ‘Drinking Oil and Smoking Gas’

Drinking Oil & Smoking Gas
Drinking Oil & Smoking Gas

First of all…INTRODUCTION!

It is interesting to think of Nigeria as an overweight giant with unkempt beards irregularly scattered all over his face (at least we like to pride ourselves as THE GIANT OF AFRICA). Even an overweight giant becomes a burden to itself.

Giant of Africa
Giant of Africa?

His excessively rotund and roly-poly body is as a result of the over-consumption and excessive reliance on a particular kind of food nutrient.

He likes to drink oil and smoke gas.

Quite frankly, no human species can survive or thrive with that kind of dietary equation; in fact, such a one is a disaster waiting to happen.

                   Also Read: God has plans for Nigeria – Osinbajo

After the discovery of fossil oil at Oloibiri area of Bayelsa in 1956 in commercial quantity, petroleum industry in Nigeria became the largest industry.

Oloibiri
Oloibiri

Oil, therefore, supplied approximately 90 percent of foreign exchange earnings and about 80 percent of federal revenue and contributes to the growth rate of Gross Domestic Product (GDP) of our economy.

The oil boom of 1970s made Nigeria rely heavily on crude oil and natural gas for its continuous supply of economic diet. Crude oil has since then become the darling of our nation; she received preferential treatment to the detriment of our first love (Agriculture).

Eventually, agriculture which in times past earned us at least 70% of our foreign exchange deteriorated very fast because our policy wonks became derelict in their sacred obligations to her (Agriculture).

Today, the salubrious broth called crude oil has started to turn sour and rendered our taste buds sore. Significant precincts of oil-rich regions are no longer habitable due to oil spillage.

The persistent groundswells of legitimate agitations and destructive activities by militants in the Niger Delta have almost crippled the economic wheels of our dear country.

The bludgeoning and bloodying of our nation’s “economic head” by corrupt practices and sleazes in the public and private sectors are all a part of the curses and crosses emanating from our overreliance on crude oil.

It is shameful that we still grovel at the feet of crude oil when countries on the global pedestal have begun to embrace and deliberately fade out their reliance on it by cannibalizing and diversifying other sectors.

Thespians in the crude oil intoxication Melodrama

thespians
The thespians

Our ludicrous fixation on oil further deepened as we now have a President in the person of Muhammadu Buhari, who shuttles between his primary role as the chief executive helmsman of the Federal Republic of Nigeria and the substantive Minister of Petroleum.

However, when we thought that we have heard and seen the last of the behavioural debauchery that took place in past administrations from crude oil intoxication, the recent wrangling between the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu and the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti K. Baru regarding the alleged awarding of contracts without due consultation with the minister betrayed our gullible optimism.

The melodrama became even messier when the Vice President, Prof. Yemi Osinbajo debunked widespread statements that he approved the said sum as the Acting President during the period Muhammadu Buhari was on his medical vacation. Regardless of who is right or wrong, the obvious solution is a total overhaul and sanitation of the inherent tacky climate in the oil sector.

Sad yet is the fact that the President’s Chief of Staff, Abba Kyari is a member of the Board of Directors of the NNPC, according to legal experts, this is wrong in its totality. Unfortunately, this and much more have been handled like nothing is happening.

If truly our President intends to be involved personally, operationally and officially in the development of the Nigerian project, then he should hands-off the oil ministry as its head, and get a hands-on on some ministries like Agriculture, Health and Education – all of which are in dare need of a state of emergency.

If Nigeria perpetuates in this state of plateau; posturing itself as the biblical “fig tree”, it might eventually fall like the proverbial humpty dumpty for overreliance on oil “blocks”.

While the world is running, jumping and jetting into the future with precise plans and ground-breaking innovations in Science, Technology, Medicine, Agriculture, Art etc., Nigeria is busy performing the “moon walk” and sliding backward very fast into antiquity.

It is heartbreaking that our country is still unnecessarily dependent on fossil deposits that have become more or less a curse and an albatross to us as a nation instead of a great vault of opportunities to all and sundry.

Death and burial of crude oil

A Resident fetching Crude Oil from leakage at Adibawa Well 8 in Edagberi Community in Rivers State.

It is instructive to note that countries like Norway, India and France have decided to stop the exploration and production of crude oil by year 2025, 2030 and 2040 respectively in order to combat the deleterious and hazardous effects of climate change.

There seems to be a growing movement by these countries to force the extinction of vehicles that run on fossil fuels. They have resorted to the production of electric cars and the complete obliteration of petrol and diesel-driven engines.

Volvo Cars became the first mainstream automaker to sound the death knell of the internal combustion engine, saying that all the models it introduces starting in 2019 will be either hybrids or powered solely by batteries.

Their goal is to drive a sharp stake through the heart of carbon emissions; the boogeyman whose corollary effects manifests as global warming, depletion of the ozone layer and its other destructive appurtenances.

European countries like England, France, Norway, Denmark, the Netherlands, and Germany are making definitive moves away from the use of fossil fuels. They have completed plans to announce the death and burial of the era of fossil domination.

Big car manufacturers like Tesla, Volvo, Renault and the PSA Group are beginning to embrace alternative sources of powering cars through electric, solar and battery.

The repugnant smell of doom and gloom

On a macro scale, what are the economic implications of these decisions by some of the stakeholders and key players (countries and car companies) in the crude oil space on the African continent, heck!…on Nigeria? What will be its effect on our social, political and cultural survival?

Before reaching any hasty conclusions, it is important that we understand the sundry contributions of the oil sector to our nation.

Also, how bright will the future earnings of Nigeria be? Nigeria being a member of The Organization of the Petroleum Exporting Countries (OPEC) and the second largest producer of oil in Africa?

OPEC

Your guess is almost as good as the writer’s.

We would definitely hit a slide due to the sudden drop in the demand for our crude oil.

In retrospect, when the price of oil fell from highs of about $112 a barrel in 2014 to below $50 in 2016, Nigeria was thrown into recession. It is, therefore, better imagined what will happen to Nigeria if European and Asian countries completely deviate from fossil fuel dependence to other healthy alternatives like electricity and solar, knowing fully well that Crude oil sales account for 70% of government income.

Although government have had tiny sparks of successes in several non-oil sectors like agriculture, however, it seems all we can boast of at best are “tiny sparks” because of poor storage, haulage and management of agricultural produce, which is gradually becoming an embarrassment to our nation especially with the outright rejection of our export agricultural produce in Europe, United States and other parts of the world in recent times. What a shame! We can do better in Agriculture only if we set our minds, hearts and hands to it.

Salvation in the Non-Oil sector?

There is a portion of one of the Holy Books that says: “At least there is hope for a tree: If it is cut down, it will sprout again, and its new shoots will not fail…. at the scent of water it will bud and sprout again like a new seedling.”

There's hope
There’s hope

Last month, the National Bureau of Statistics (NBS) unveiled the bright figure of 0.55% GDP Growth in the second quarter (Q2) of 2017; this indicated that we are “statistically” out of recession. This momentous declaration by the bureau was a joyous daybreak to millions of Nigerians who had been seared in the flames of poverty and encumbered by the manacles of economic hardship.

However, for us to avoid our “joyous daybreak” reversing into long nights of starvation, those at the helms of affairs of our great country need to latch upon and capitalize on the non-oil sector to bring to us the dividends of democracy.

Below are a few statistics from the NBS:

According to the preliminary results for the second quarter of the year 2017, Nigeria’s economic recovery was driven principally by the performance of four main economic activities comprising Oil and Non-oil (agriculture, manufacturing and trade).

The results showed that Oil GDP recovered significantly from -11.63 per cent in Q2 2016 and -15.40 per cent in Q1 2017 to 1.64 per cent in Q2 2017.

GDP

While Oil GDP expanded considerably in the second quarter of 2017, Non-oil GDP only grew at 0.45 per cent, down from 0.72 per cent in the preceding quarter and -0.38 in the corresponding period in 2016.

Agriculture continued its strong and positive growth, which it had maintained throughout the recession, growing by 3.01 per cent in Q2 2017, from 3.39 per cent in Q1 2017 and 4.53 per cent in Q2 2016.

Manufacturing retained its positive growth for the second consecutive quarter in Q2 2017, growing at 0.64 per cent compared to 1.36 per cent in Q1 2017 and -3.36 per cent in Q2 2016.

Trade which has a dominant share of GDP remained negative at -1.62 per cent, but the contraction in the sector decelerated from the -3.08 per cent recorded in Q1 2017.

The results also showed that the industry sector grew positively by 1.45 per cent in Q2 2017, after nine consecutive quarters of negative growth since Q4 2014.

Service = 53.73%

Industries = 23.31%

Agriculture = 22.97%

Does it look like Nigeria’s economic future is bright? Yes! Can we begin to pop Champagne and take a little rest? Absolutely NOT!

Although the oil and gas sector accounts for about 35 per cent of gross domestic product, and petroleum exports revenue represents over 90 per cent of total exports revenue, Agriculture is expected to feature as one of the pertinent driving force in Africa’s economic rebirth and is already ranked among the critical factors contributing towards an increasing curiousity in the continent’s native resources.

It is estimated that over 60 percent of the world’s available and untapped farmland is in sub-Saharan Africa. Interestingly, for Nigeria, agriculture contributes about 22 percent of its GDP.

With the allocation of N92 Billion to the Agriculture sector, and the ubiquitous potentials in other sectors like tourism, entertainment, art and culture, manufacturing, trade and other non-oil sectors of the economy, the government might be able to improve the economic aesthetics of Nigeria.

A few Recommendations

We need to consciously divest our reliance on the oil sector and begin to focus on other non-oil sectors; especially those that are currently driving world economies. For example, in Asia, technology drives the wheel of their economy; in Europe, agriculture does it for them; even as they expand and bolster their technological strength.

Our leaders need to be selfless and sincere in the making of policies that are people-centred and not one to fuel their political and personal agendas.

Also, our Presidents need to eschew the ideologies of heading the oil sectors alongside their executive portfolios. This appears like they have ulterior motives.

Citizens should use the power of their votes to elect fresh and credible individuals with concrete antecedents of leadership and accomplishments. These should be individuals who can clearly enunciate their plans and can galvanise the people towards the achievement of these plans.

We need to invest more in tapping the resources between our ears and not those beneath the ground. In Asia, there are technological schools whose certifications are as valid as those of the universities; making it a viable alternative for everyone to have access to education. The never-ending battle between the B.Sc and the HND is a mere case of “potayto…potahto”; just mere nomenclature. We need to place more premiums on competence instead of certificates.

Moreover, the clamour for true federalism, especially when it bothers on resource control and decentralisation should be placed in the front burner. This will make states more competitive and accountable to their people.

These recommendations (though not exhaustive) are some of the immediate approaches we can engage to move the economic and political wheels of our country.

Sidon look no dey!

Twitter: @memorinken

Facebook: Moses Emorinken Omoikhoa

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