Oil income a thing of the past - My warning to Nigeria

[Richard Akindele]

Nigeria is a major oil supplier. Currently, The nation is earning upwards of $1.4 billion a week (i.e. N200 billion a week). This is reported income. Which means we haven't taken into account all the under-the-table deals that are inevitably taking place.

This huge oil income is basically a no-brainer. At the moment, it does not matter how much oil Nigeria can produce, it'd get sold with no marketing effort.

For a nation with this kind of commodity, the country's economy should be booming, and be among the best in the world. But, we all know the answer to that question. Corruption is rife, and is now part and parcel of our system. Corruption has been endemic for so long that it seems people have come to accept it as the norm. Nothing beyond inaudible grumblings is being done about it.

Nigeria, with all it's oil income, has nothing to show for it. Nigeria's economy is no better than that of its neighbors such as Ghana. Yet, Ghana has never earned a penny of oil money.

The price of gasoline is at an all time high all over the world. The main consumers are the industrialized nations. What this means is that in the coming years, we're going to start witnessing a shift from an oil-based economy, to a system that relies on alternative sources of energy.

Brazil has done it. It derives energy primarily from sugar cane now. Most of their automobiles are powered by ethanol, a product of sugar cane.

America will soon follow suit, since high gasoline prices will affect the standard of living of common folks a great deal.

If America fails to need as much oil, how would OPEC income be affected? One could say that since the USA is by far the largest consumer of oil, the demand for oil would dwindle, which in turn may lead to a drastic plummet in oil prices.

Another reason that America would want to get off oil is that oil income helps to fund global terrorism, something America has spent too much money trying to combat. Clearly, there is not going to be a diplomatic solution to terrorism. Therefore, it makes absolute sense to combat terrorism by cutting off its funding sources.

At the end of the day, if America's oil demand falls, and the prices of oil becomes low, where would that leave Nigeria as a nation? What other sources of income exist for us to fall back on? A nation of 150 million, with no income is doomed. If we think poverty in Nigeria is high today, wait until oil becomes an unwanted product.

Basically, this is a wakeup call for Nigeria to shape up and spend its oil income wisely now. Use it to develop income-generating infrastructure, so that the nation's economy can still be viable in the absence of oil income.

This is my warning to Nigeria.

[Richard Akindele]

Just days after my warning was penned, this came out. I'm glad somebody is at least listening. The hope now is that it won't turn out to be all lip service.

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Federal Government has restated its determination to diversify the revenue base of the Nigerian economy through accelerated growth of the non-oil sector.

President Olusegun Obasanjo stated this yesterday at the opening of the Abuja International Trade Fair.

Obasanjo, who was represented by the Secr-etary to the Gove-rnment of the Federation, Chief Ufot Ekaette, affirmed that government was pursuing policies and programmes, which are principally targeted at encouraging local entrepreneurs and stimulating the growth of non-oil sectors of the economy.
In his words, “A major thrust of the various economic reform programmes which we have packaged into the National Economic Empowerment and Devel-opment Strategy, NEEDS, is to enable the private sector play its role more effectively as the engine of economic growth.

It is our hope that the reforms in the public sector would be complemented in the private sector with a view to restructuring operations to ensure marked increases in value addition, number of transactions, trade flows, as well as enhancing competitiveness.�
The President stressed his commitment and resolve to continue efforts aimed at enhancing the investment climate and lowering the cost of doing business, adding that the recent launch of One Stop Shop Investment Facilitation Service was targeted at providing a more internationally competitive, flexible, and user-friendly environment for foreign and local investors.

He urged the organised private sector to join the federal government in its uncompromising fight against corruption and fiscal indiscipline saying, “The organised private sector has a very critical role to play in this regard.�
Minister of Commerce, Idris Waziri stated that the trade fair was an avenue for industrialists and manufacturers to showcase Nigeria’s potentials to the whole world.

“The public private partnership which government is encouraging should be take advantage of by the private sector to develop the economy. Today, under this administration, the economy is performing well and Nigeria is moving towards one of the most dynamic markets in the world.�

Source: ThisDay