Falling Oil Prices: A Blessing to Nigeria

Oil prices are dropping. 1st August, $104 per barrel, 28th October, $82 per barrel and today, December 15 the price stands at approximately $58.65 per barrel. Are we at the bottom? Can it get worse than this? The prophets are prophesying already, “Doom awaits Nigeria”. Really? As an Econo-jurist of this great nation, I hereby dissent.

 


Nigeria is a nation richly endowed with a variety of valuable resources. All 36 states of the country can boast of at least three (3) which range from minerals to metals to stones. It is pertinent to state here that crude oil and gas are only the tip of the ice berg compared to unexploited reserve of limestone, marble, iron-ore, lead/zinc, gold, gemstone, coal, kaolin, rock salt and more which are existent in Nigeria. In addition, the country also prides itself with over 40 million active young population that are creative and filled with untapped potentials. An interesting quote from Myles Munroe reads: “One of the greatest tragedies in life is to watch potential die untapped.” It is therefore important that we learn from this and begin to maximize the potential in the intelligent young
work force we have.

 

Since the discovery of oil in the 1950s Nigeria’s economy has been dependent on one major source of revenue-oil, which has failed to function as a catalyst for growth. This is however not the focus of this article, you can read my article titled “Oil and gas: The stimulant for wider national development”.

 

King Odewale in Ola Rotimi’s “The Gods are not to blame” made an interesting point and I quote, “When the wood insect gathers wood it is on its own head it carries them”. Financial and Economic analysts see the current drop in oil price as a predicament for the world, particularly Nigeria. This is the time for us to wake up, remove the blindfolds, realize a grave mistake we have made for far too long, learn and benefit from it. Currently, petroleum accounts for up to 80% of all government revenue and over 90% of the country’s exports, however if we begin to think of alternatives of creating wealth by investing, principally, in our human capacity and also the several other mineral resources, we will not only be reckoned as the giant of Africa but as the giant of the world, yes quote me.

 

One of the world’s wealthiest men, Bill Gates, had Information Technology (IT) as the source of his wealth. The world’s youngest billionaire is Dustin Moskovitz and he was Mark Zuckerberg’s Harvard roommate and Facebook’s third employee. Source of wealth is IT. According to Forbes’ list of the world’s richest people, 20% of the first 100 people on the list derived their wealth from IT. Do you go a week without getting e-mails from Nigerians trying to hack your credit cards/passwords or getting you to click on a link that will clone your data? There are no excuses for such fraudulent activities, albeit the brains behind these e-mails can become IT geniuses if given the right opportunities in a favourable economy. IT is driving economies worldwide and it can do same in Nigeria.

 

In the past few years Brazil has been a reference agricultural powerhouse and now ranks amongst the world’s five largest agricultural producers and exporters. In essence, agriculture is driving the economy of the largest South American country despite their large oil and gas reserve. There is a lot to learn from their policies. We must strive to emulate the character and spirit of model economies we intend to surpass.

 

Nigeria is also largely an importing country and this stiffens the market for local producers, consequently leading to loss of jobs and incomes. According to The World Bank, Dubai’s economy was also initially built on revenues from the oil industry, however revenue from petroleum and natural gas currently account for less than 2% of the economy’s GDP. Currently, Dubai is rapidly developing its manufacturing sector by producing a wide range of competitive export products and has focused its economy on tourism, aviation, real estate, IT and finance. Nigeria can also begin to focus on its manufacturing sector as a step in diversifying its economy.

 

Nigeria is arguably the biggest economy in Africa with a GDP of $510 billion, Next are South Africa and Angola. Kenya is fourth, but happens to be an inspiring model as she boasts of a GDP of $53.1 billion and her economy is highly diversified. The strong performers driving the economy are agriculture, retail and transport. In mid-2012, oil was discovered in Kenya with over 300 million barrels worth of reserve. A blessing? We shall find out in 2016 when production commences or perhaps they should ask their “big brother” Nigeria.

 

This constant decline in the price of crude is the best thing that could happen to us as a nation despite the implications on our immediate national budget and economy. It serves as a pointer to the fact that we have been travelling 1,000 miles in the wrong direction. This is an opportunity to better secure the future of our great country. My fellow Nigerians, let’s shut our ears to the prejudiced negative analysis making the rounds. We know our story and reality better. We can now see that we cannot depend on petroleum for much longer. We can build an economy with multiple sources of revenue. We have the human capacity and the resources, let’s do this.

9 Comments Add yours

  1. Ben Akulasa says:

    This is a wake up call on our country’s leaders, I wish that our decision makers could also read this article.
    Ken you are a visionary leader, I beleive in you and I will continue to do so.

  2. Toyosi Ogedengbe says:

    A truly inspiring and truthful reflection of our current situation. It is a shame that what could have been transformational from a positive perspective has actually been detrimental. I dare say that if we did not have oil we would have been better off as our other resources, both intellectual and otherwise, would have received further interest and investment. We will see if indeed we, the Giant of Africa, will awaken from our slumber.

  3. Yemi Sulaimon says:

    Wake up call to all Nigeria. Great Point from a man of wisdom.

  4. Henry says:

    Nice article Sir… still echoing in my mind that line from Ola Rotimi.

  5. bright says:

    Quite a fantastic piece . well said… In every situation we should make d best out of it… Positive thinking .

  6. Ken Etete says:

    Thank you Guys, we have to work this together, there is still hope.

  7. ugochukwu uruah says:

    I think you have said it all, but i have to point out that we must make the power sector a reality, we can never industrialize and become less oil dependant if we dont have adequate energy to drive an industrial/economic revolution

    1. Ken Etete says:

      This is true, we need plenty of energy to become an industrialized Country. With falling Oil price, there will be less incentive to export the raw crude but use it for the much needed industrialization of Nigeria. With no incentive to export, you will have no choice but look at internal options. This is the clear option far and beyond the value of the strong Human resource that is under utilize for the greatness of the Country because we are too focus on easy income sources exporting Oil for big returns.

      Which Countries are happy for the drop in Oil price, they are the Countries that consume the Oil for industrial development. They are so happy. If we start to use the Oil local and export the finish product, we will create new jobs and generate more revenue.

  8. Billy Edike says:

    Well said Sir,but I think this is where the private sector has a major role to play.

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