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Crude Oil: A blessing too much

By Zayyan U Gwandu, Taremi Zuokumor and Maryam Zakari on 18/11/2018

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The good old days are gone when the groundnut and other agricultural produce were a major contributor to the Nigerian economy. They were the admiration of everyone from near and far, the pride of the nation. The production of groundnut in Northern Nigeria dominated the west Africa region, 41 per cent of the produce were from northern Nigeria. There were also cocoa farms in Western Nigeria as far back as the 1880s in Lagos and Ota. By the 1950s to 70s, Nigeria was the second highest producer of cocoa in the world. There was oil palm in the Eastern Region. There was rubber, cotton, tobacco, to name but a few. The economy was stable. Nigeria was fine.

In 1956, Nigeria received further blessings in the form of crude oil. Crude oil was discovered in Oloibiri in the present day Bayelsa State. This was to change the course of our beloved country’s history in magnanimous proportion. Following the discovery of crude oil by Shell D’Arcy Petroleum, pioneer production began in 1958 from the company's oil field in Oloibiri in the delta area of the defunct Eastern Region.

 By the late 60s and early 70s, Nigeria had attained a production level of over 2 million barrels of crude oil a day. This meant daily remittance of millions of dollars into the foreign reserve. The country began to make strides in oil exports. Before long, Nigeria was being recognised among the elite. Touted to become a “super power” soon. The naira commanded respect everywhere in the world. 

 Amid the economic boom revolving around crude oil, the country managed to shun many of its leading economy drivers and focused mainly on crude oil export. Corruption started brewing in the oil sector. Subsequent governments - especially during the military era - kept a lot of the proceeds from crude oil sales for themselves. It was easy money which led to some of our former “farmers” suddenly becoming oil block owners. This unfortunate development, of course, had a negative effect on the country’s agricultural sector. Production was severely affected. In the 60s and 70s, groundnut production was still significant to the economic development, with output estimated to be more than 1.6 million tonnes. But during the early 80s, the production of groundnut deteriorated to a smaller extent of 0.7 million tonnes. 

 The groundnut pyramids were not the only victims from the oil boom that was discovered in the late 50s. The cocoa production in the South-west was affected also. In the 1950s and 1960s, before crude oil was discovered, “cocoa was the dominant foreign exchange commodity that secured the national wealth of the country.” According to Pa Olusina Adebiyj, “cocoa used to be the glory of the west. The nation’s contribution of cocoa production in the global market degenerated when the oil boom set-off effortless outflow of capital that removed the earnings from agricultural export and taxed as a considerable derivation of revenue for the nation.”

 Now that we are here, how can Nigeria make it right? How can Nigeria diversify and explore other viable options to strengthen its economy and make it independent of the global crude oil price, which seems to dictate the livelihood and welfare of the average citizen?

 Scholars, politicians, journalists, commentators have proffered different measures to revive the once-vibrant agricultural sector. Some critics have called for the adoption of fiscal federalism. Fiscal federalism is a kind of approach with the devolution of governmental responsibilities, power and, especially, state earnings and local government earnings. It has been argued that each component unit in government will have autonomy over its financial resources. The decentralisation of power and other functions will enhance economic development and, also revive the agricultural sector that has been neglected. 

 Another solution is for the Federal Government itself to put more effort to support diversification. More investments should be made towards agricultural research and development, including science and technology. This area is where Nigeria has been left far behind. This has greatly hampered the country’s production capacity, compared to the developed Western countries or even our “Jollof Rice” rival and neighbour, Ghana. If adequate investment is made in agriculture. Nigeria will surely begin to see progress in production.

The present administration led by President Muhammadu Buhari, has initiated different policies for the diversification of the economy away from oil. In July 2016, the President launched the Presidential Enabling Environment Council (PEEC), “with the objective of improving the business environment in the country.” The President has displayed outstanding passion his quest for the diversification to non-oil sector.

 There are some states, for example Kebbi, which has made huge strides in this respect with its Rice production initiative. The state has partnered with Lagos to produce “Lake Rice”. This initiative has created jobs and has encouraged many to even quit their jobs and go back to the farm. At the end of the year, Kebbi State was able to generate about N150 billion, as reported by Vanguard in August 2018. According to the state governor, Sen Atiku Bagudu, “a nation that cannot feed its people will suffer a lot of international market vagaries.”

He added that the state has also entered into partnership with an indigenous company for the building of an ultra-modern sugar processing plant with a total cost of about $330 million, when completed. The project, he said, is sited in Augie Local Government Area, a border town between Kebbi and Sokoto State.

These agricultural transformation drives of the administration encourage farmers to not only be active and productive but, to a large extent, it could reduce youth unemployment in the state adjudged as the most peaceful in the North-west geo-political zone. This is a very good example of when agriculture pays.

 If other states could invest in agriculture, as Kebbi is doing, maybe, Nigeria’s good old days of agricultural prosperity have a chance of repeating itself. Against this backdrop, younger Nigerians may witness a diversified and vibrant economy which fortunes are not decided by a fluctuation in the price of one commodity.

•Gwandu, Zuokumor and Zakari, Radio House, Federal Ministry of Information, Abuja, can be reached on: gwanduzayyan@gmail.com;emomotimi7@gmail.com;masico82@yahoo.com

Source News Express

Posted 17/11/2018 10:12:57 PM

 

 

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