Petroleum, A Percieved Curse To Nigeria, The Clearance Of A Big Misconception And The Doubting Thomas

One of the most widely held view by Nigerians is that the transition from an agrarian society to an oil based society was wrong and isn’t helping the situation in Nigeria, but in the course of this text, efforts are made to wrong this opinion and see the issue from another perspective and angle entirely.

Prior the discovery of oil in Nigeria, the agricultural system of economy was in practice which was basically carried out in duo forms, subsistence and commercial agriculture is understood to be the cultivation of lands and rearing of animals for man’s use, thus farming, hunting, pastoralism all happen to be agrarian systems. In those days, It is very real, true and factual to say and conclude that the cost of living in Nigeria was easy to afford because everything went smoothly, Employment wasn’t a great task then as it is today, As soon as an individual becomes powerful enough to work, he or she is exposed to his or her father’s farm land and farming techniques which subsequently becomes his or her working place.

The system favoured most people both in providing daily meals for themselves and their family, and cash used in the pursuance of all other needs, Foods were at individuals’ disposals and localities and as such people do not have to walk extra miles to get food. Farmers also trade these agricultural produces for money, hence, life was so easy and convenient for all Nigerians. More importantly, the government also helped the situation by managing efficiently and judiciously the profits and incomes generated from exporting of agricultural produces, the incomes were used to create a lot of social amenities, infrastructures and services, which included schools, provision of water, hospitals and so on that ease living in a country, Chief Obafemi Awolowo’s deed illustrates and buttresses this fact. This presumes that the economy was based on a mixed type where both the government and private individuals were allowed to control the means of production, distribution, and exchange of economic wealth in the society.

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Surprisingly, this same system (mixed) has been in practise till date in Nigeria but in another dimension through the concentration on petroleum as the backbone of the economy rather than agricultural produces, the same result had been expected to come out of this because Nigeria is a net exporter of oil as it was a net exporter of agricultural produces in the agrarian days, However, the bottom line of the story has never been the same, as the economy keeps getting dastard day by day and the cost of living continues to rise, Some factors are responsible for this because the Cosmo is structured in a way that things are inter-related, and a thing must cause or affect the other.

It is very interesting to state that Chief Awolowo sponsored free education and made some other social services available in Nigeria with the revenues generated from Cocoa in the recent years, Funny enough, Petroleum can generate thrice the income generated from Cocoa, but how the revenue gathered from petroleum is been managed and used is still unknown till date and therefore becomes the subject of the matter, there has been no advancement in the social needs of Nigerians, this therefore presumes the mismanagement of the revenues generated from Petroleum by our erring leaders, The former minister for petroleum, Dizieni Alinson Madueke’s case attests to this. The situation whereby, funds that could feed the whole Nigerians and at the same time provide enormous social services are kept and found in the custody of a single individual, this fund is generated from nothing but petroleum, thus, more could be done to drive Nigeria to a greater height through the income generated from petroleum provided our leaders manage it very effectively well.

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It is true to say that Agricultural produces also contributed massively in growing and heightening the country’s GDP because according to some quantitative analysis, It contributed about 26.8% of the total GDP of Nigeria and accounts for two thirds of employment in the 1990s, but the deception and misconception lie in the belief that it was the abandonment of agricultural practices and the concentration on oil that fostered and instigated the current economic depression and recession in the country. Oil has been generating thrice that of agriculture of the total GDP of the country which assumes the triple of the one generated from agricultural produces as mentioned earlier.

According to a quantitative report culled from ( The GDP in Nigeria shrank 0.5 percent year-on-year in the first quarter of 2017, following an upwardly revised 1.7 percent decrease in the previous period. It is the smallest fall in five quarters of contraction, as oil sector continued to decline although at a slower pace. The oil sector went down 11.64 percent year-on-year, following an upwardly revised 17.7 percent drop in the previous period and marking the fifth consecutive quarter of falls. The country produced 1.8 million barrels of crude oil per day, down from 2.1 mbpd a year earlier. As a result, oil sector accounted for 8.90 percent of the GDP compared to 10.02 percent a year earlier.

The non-oil sector advanced 0.72 percent, following a 0.33 percent contraction in the previous period. Ouput rebounded significantly for transport (10.55 percent vs -5.32 percent in Q4), manufacturing (1.36 percent vs -2.54 percent in Q4) and construction (0.15 percent vs -6.03 percent in Q4). In addition, production grew faster for information and communication (2.73 percent vs 1.38 percent in Q4), water supply, sewerage, waste management and remediation (12.63 percent vs 10.76 percent in Q4) and fell less for real estate activities (-3.10 percent vs -9.27 percent in Q4), electricity, gas, steam and air conditioning (-5.04 percent vs -5.16 percent in Q4) and mining (-11.46 percent vs -17.26 percent in Q4). Meanwhile, financial and insurance (0.67 percent vs 2.68 percent in Q4) and agriculture (3.39 percent vs 4.03 percent in Q4) rose less and trade continued to shrank (-3.08 percent vs -1.44 percent in Q4). The non-oil sector accounted for 91.10 percent of the GDP, up from 89.98 percent in the first quarter of 2016

Apart from quantitative analysis, Some qualitative observations also show that the problem with the country’s economy today is not in any way attributed to the concentration on oil only but rather the ability to manage effectively and efficiently the incomes generated from it by our leaders. A typical example and instance is the fact that some countries in the world operate on oil only as their economic backbone, Saudi Arabia as a case study depends largely on oil to boost its GDP, Infact, most of the foods and some other agricultural produces consumed in Saudi Arabia are often imported, In the same vein, this country has been able to maintain the status of being one of the economic power given that it depends on oil, specifically petroleum, Saudi Arabia is a net exporter of petroleum, and with the incomes generated from it, the country is able to standardise the livelihood of its citizens and also sponsor some capital projects in the country and other countries.

It is very key and germane to note that Saudi Arabia was able to achieve the above mentioned because of the efficient management of the oil sector by its authority, Though, We do not possess massive amount of petroleum as Saudi Arabia, but if the little one we have is managed with effectiveness, the woes and decline facing our country especially in terms of its economy shall reduce drastically to a desired level.

Petroleum has been a player in heightening Nigeria’s GDP until recently when it contributed lowly to the total GDP of the country and this was due to the mismanagement of the economy which later led to the shrinking and degeneration of the barrels of oil produced per day in Nigeria. Nevertheless, Petroleum will continue to be an important element in growing a country’s GDP. Instances from the case of Saudi Arabia have been noted earlier, therefore, the assumption by many that the transition from an agrarian society to an oil based one is responsible for the turmoil and harshness faced by the economic sector in Nigeria is not often correct, but rather the problem lies in the ability to manage the incomes generated from oil effectively and efficiently.

Conclusively, Nigeria leaders have more to learn from other international leaders in managing their economic resources and most importantly the revenues generated from them. More so, the diversification of the economy should be employed so as to make a part cover the loophole of the other without cause for alarm. Petroleum is one of the natural resources that we are blessed with in Nigeria, like other countries have their own distinct natural resources too, It is therefore salient to utilise it very well in order to drive Nigeria to the highest level of national development.

Abdulganiy Abdullah O,
Director, Social World.




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