Dwindling oil revenue: Nigeria’s prosperity in the making
Before the discovery of oil in Oloibiri, Bayelsa state in 1957, agriculture was the main stay of Nigeria’s economy. In the 1960s, agro-allied firms, mining groups and low-skilled manufacturing industries led to the then high per capita Gross Domestic Product (GDP) of Africa’s most populous country.
We remember the glory days of the groundnut pyramids and the cocoa house. Mining of tin in north central Nigeria, brought about the influx of people from different regions including Europeans. From Enugu to Lagos, mined coal were conveyed to the seaport for onward delivery to western countries. The economy at that time was booming and the country was a leading example of Africa’s rising narrative.
Foreign students from neighboring African countries and far-flung European powerhouses came to Nigeria for tertiary education. Nigeria’s universities were the shining light in the then emerging African education movement. Nigerians were respected around the world.
Then discovery of crude oil suddenly placed Nigeria among the big boys, oil exporting countries, millions of petrol-dollars poured into government coffers. Then came the oil boom of the 1970s and gulf war in the early 1990s, during which crude oil price greatly increased and Nigeria’s government was smiling to the bank.
Dazed and carried away by the easy crude oil money, the government began paying less attention to agriculture and manufacturing. Nigeria focused mainly on the black gold. A mono-economy was built around the oil and gas sector.
Government paid lip service to the issue of economic diversification. Various scholars and economists portrayed the dangers of running a mono-economy but their advice was unheeded.
In late 2014, the price of crude oil crashed globally again. The price of Nigeria’s bonny light crude dropped from over a $100 per barrel to around $28 per barrel and the economy struggled. This crash has happened before in the early 1980s and very little was learned.
However, in 2016, the sharp fall in government revenue forced Nigerian leaders to look inwards for solutions. In a bid to solve current challenges, the present administration is intensifying efforts to diversify the economy, breaking Africa’s largest economy away from crude oil dependence.
Nigeria has formulated the ‘consume what you produce’ campaign. Under this movement, citizens are encouraged to buy indigenous goods as opposed to imported ones stimulating local production. How well has it worked out?
Slowly but steadily indigenous companies are expanding as demand soars for made-in Nigeria goods. Nigerians are buying locally grown rice, tomato and other food stuff that hitherto were mainly imported from Asia. There is a new shift to patronize made-in-Nigeria vehicles, furniture and electronics.
Food processing and packaging plants are recording increased profits in their annual reports. Foreign direct investment in the agro-allied sector has been dubbed the new gold rush. This is were quick returns on investment is happening. These days who really buys crude oil.
Shale gas, an emerging form of fossil fuel, has transformed America and Europe. In the coming years – United Sates and many developed countries, will be energy independent and then you may have less demand for the black gold in the global market.
For Nigeria, the future is agriculture and the diversification that comes with it. A country endowed with vast expanse of fertile land, ready market and young workforce.
On Africa’s diversification hangs many of the key driving levers of growth. It is one of the main engines that drive human resource development, manufacturing and drags people out of poverty. It is also a tool for keeping young populations in check, breaking them away from unexplained tragedies and the cycle of waste.
Would diversification be possible if the price of crude oil rebounds? Your answer is as good as mine. But inner city families are beginning to turn to small start ups. Nigeria has just started and amazing opportunities lay ahead.
When Nigerian farmers start to process and package perishable produce like tomato, fruits, rice and spices in mass quantity meeting local demands and exporting to neighboring African countries – then the country will explode. For agriculture is the baseline of all enduring manufacturing adventure.
Collective rural farming have been known to inspire economic branches like industrial plants and high tech enterprises. You have countries with rich farming traditions, for example Israel, where family values are very deep. Farm projects built along tribal lines have changed the course of the country’s commonwealth.
This may well hold the key to Nigeria’s rural breakthrough. There are over 250 ethnic groups in Nigeria. Resources mobilization along tribal village lines can be refreshing. This could be one of the most effective ways to jump start Nigeria’s struggling economy in both the northern and southern regions.
In Israel, factories and farms account for an output, worth US$8 billion. This country is about half the population of Lagos, Nigeria’s commercial capital and less than 4 percent of Africa’s most populous country. But Israel’s footprint in food export is big.
Nigeria, on the other hand, Africa’s most populous country with over 170 million people, has a flailing agro-allied industry and cutting edge tourism-related infrastructure is limited and under developed. But oil is slowly recovering and the people yearn for more.
Nigeria has to buckle belt and once again grow cash crops. There has to be entrepreneurs out there ready to re-position the country. Great minds are arriving. Nobody can chart the country’s path better than the 170 million people. A land of stunning mineral reserves and teeming young population.
Nigeria can lead way in the export of cocoa, groundnuts often dubbed peanuts, rubber, cotton and palm oil.
Cocoa and palm oil still interest southern farmers. Groundnut pyramids remains one of the highlights of northern regions. Then you have tomato, sorghum, corn, cassava, yam, fruits, spices and every thing in between.
Once the match towards food self-sufficiency begins, then the economy will grow in harmony and then set off other opportunities. Manufacturing and technology will naturally follow.
Home grown inventors will inspire a new generation of fine thinkers and network of local industrial plants and businesses that include fruit drink companies, textile and fashion, footprints in renewable energy and waste recycling, Culture tourism and fine restaurants, film production
and photography, sea and rail transport companies and much more.
Mobile technology is the next big business. This will open a new chapter in Africa’s unique generation.
Technology entrepreneurs are bringing about solutions in sectors like healthcare, retail shopping, internet movement of goods and services. But the technology story is for another day.
Nigeria, Africa’s largest economy, is within reach and could well change the course of the continent in positive ways never seen before, breaking the people away from fossil fuel and solid minerals dependence and then the transition to a more prosperous society. Something only God can inspire.
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