End of Oil, Beginning of Prosperity: Nigeria

End of Oil, Beginning of Prosperity: Nigeria

One inexplicable phenomenon among Nigerians is their response to the news that Nigeria’s oil is facing a demise as a major export commodity. That would be “The End of Oil.” It is a distressing reality to grapple with for some in one category of the demography. Economists and political scientists who I hang out with regularly are cynical if not fearful of the implications for that state known as Nigeria. Such a disturbing reaction is probably the one to expect. We may ask, would the end of oil also mean the end of the oil curse?

Before taking the discussion any further, we should remember that Claude Ake, in 1973, wrote it was oil wealth that was the exclusive singular thing holding the nation called Nigeria together. The implication is that when the reserves of exported oil become are no longer of commercial value or if oil becomes obsolete, Nigeria as a nation-state may face rapid disintegration.

In the other category of the demography, many Nigerians expressed unexpected rare joy and optimism when they heard the news. Many Nigerians believe that the days of “export and steal” associated with petroleum oil and gas sales are over. So, the country can now appreciate the other mostly neglected resources it possesses. And put them to good, transparent and efficient use. Captains of industries of various shades are telling us Great News. To get ready for their take-off now that oil is no longer the Father Christmas of the Nigerian economy. Prosperity is around the corner, they say! That would be great news for Nigeria – only if the nation and citizens have the preparation.

Others say that the increasing levels of violence in Nigeria will cease to occur because pay-offs to militant groups in petrodollars will no longer be readily available. Furthermore, the expected reaction under discussion by Nigerians is that ethnic-regions, especially the Northerners, can now go their ways peacefully. Many see oil, especially those from the Niger Delta, as an instrument of state and ethnic oppression – the South-South will be happy. The South East has been itching to secede for decades, and the South West will make their way. Well, if Claude Ake was right.

I invoke the Fela line, “People when no know dey happy, people when know dey look.“ Things may neither be as straightforward nor as simple as they seem. The future is difficult to guess. There is still a substantial possibility that the USA will buy ever-larger quantities of oil from Nigeria at a later date or other buyers will do the same. The trade arrangements may also be more mercenary and ecocidal than ever. That would mean Nigeria stays together under worse conditions in a less than responsible petrostate.

Nigeria, as a nation, does not have the savings, investments, and infrastructure to diversify or transition to an alternative economy without major shocks and drastic changes to the system. It is effortless to underestimate the towering role played by oil revenues in the public sector, real sector, urban development, banking, employment, services, transport, aviation and rent-seeking. The Nigerian economy, though poorly coordinated, sorts itself out with the oil sector and the ever-expected huge revenues it generates.

The excitement with the demise of oil does not seem to include the clean-up of Nigeria (the Niger Delta). Those who I have asked about the clean-up have characteristically had nothing to say about clean-ups. The Niger Delta is a witness to years of spillages, pollution, benzene poisoning, ecocide, genocide and the destruction of livelihoods. Those celebrating presume these tragedies are more than compensated for by the end of oil. Oil production will not be over in a hurry. So what is the realistic and feasible future of clean-ups in the Niger Delta?

An adequate clean up of the Niger Delta is the only basis for Nigerians to celebrate any definitive change in the fungibility or governance of Nigerian oil. How can Nigerians celebrate the end of oil? Well, when one of the six geopolitical zones of Nigeria, the South-South, is in tatters just to generate national wealth? One may conclude the pressure for clean-ups is to start with a great deal of intensity.

Nevertheless, for almost half-a-century all, the six geopolitical zones get their nurture and depend on oil allocations for their sustenance. Lagos may be the only mild exception to that rule. I see Nigeria as a country set to go through an experience akin to a man with a good job made redundant with so many constant bills and a family for which to cater. Still, his only hope of survival in the next decade is a drastic pay cut. It should make the man wiser and more innovative if he is going to survive.

Those who are aware will wonder how the apportioning of enormous and odious debt burden will be to each seceding unit of Nigeria. Those regions that got the most in development and cash will have to pay the most. The United Nations multilateral agencies and sovereign bilateral creditors have all the records; the geopolitical zones will have to pay what they owe. I see the North paying the most; they or their leaders enjoyed the nation’s wealth the most. And there are others.

The debate on the end of oil in Nigeria continues.

Grimot Nane