As heightened apprehension about the looming threat of another round of recession stirs Nigerians in the face, the new administration of President Muhammadu Buhari has been tasked to look beyond oil and urgently diversify the economy for assured future of the country.
Since its inception in 2015, the administration has been mouthing the diversification policy with oil revenue still accounting for the highest chunk of the annual national budget. According to available information, the 2019 budget is predicated on the benchmark oil price of $60 per barrel, and a planned daily production of 2.3 million barrels per day, which in essence means that the economy is still largely depended on oil with all the vagaries in the world market.
Caught in the dilemma between the desire to diversify the Nigerian economy from dependence on oil revenue, on one hand, and the age-long dream by the North to explore the prospect of reported discovery of hydrocarbons in the Chad Basin, on the other hand, some notable Nigerians who spoke with Sunday Sun berated the administration for paying lip service to the diversification policy.
This is even as NNPC indicated its desire to resume exploration activities in the Chad. With government’s renewed effort to boost the fortunes of the economy in the face of looming recession, the immediate past Group Managing Director of NNPC, Dr Maikanti Baru, said that the corporation was ready to resume exploration activities not only in Chad, but also in Bauchi, Gombe and Gongola Basin. “We will go back there as soon as we receive security clearance. There seem to be some prospects there because Niger Republic drilled over 600 wells and now they are producing while we have only drilled 23,” he said.
Since the Royal Dutch Oil Company and Shell allegedly discovered hydrocarbons in the Chad basin, which is adjacent to Niger Republic, Cameroon and Chad, successive governments have been prospecting for oil for three decades. President Buhari in furtherance of the search efforts had in 2016 directed the NNPC to commence exploration into the magnitude and prospects of the reported oil discovery. But the corporation had to suspend its activities after a team of its Frontier Exploration Services and their consultants from the University of Maiduguri were attacked and some of them abducted on July 25, 2017.
Reacting to the development in an interview with Sunday Sun, Prof Banji Akintoye, a notable Yoruba leader of thought, urged the government to revisit agriculture as a way of diversifying the economy. He said: “To diversify the economy is not a rocket science. All that is required is just to use your mind to know what is happening in the world and create an export-based economy. Nigeria is potentially a great country economically. But we do not have the leadership that can turn the potentiality into reality. They are so fixated on oil that they cannot even think of any other thing. Now, they are spending money that is supposed to be spent on education on prospecting for oil in the North.”
According to him, mechanized agriculture to boost production of cocoa, palm oil and groundnuts, among others, is the most viable option to diversify the economy.
His words: “Foremost, we need to go back to agriculture in a big way. California is the 5th or 6th largest economy in the world. And a lot of that wealth comes from agriculture. Holland depends only on dairy products and it is the 17th largest economy in the world. Agriculture is a great source of wealth. We should just go into it and stop thinking of it like an unwanted child. We treat agriculture as if it is the occupation of the illiterate, the poor and the old. Agriculture is an area we should divert energies of our young people into because that is the only way we can mechanise agriculture. Cocoa alone has become one of the biggest products in the world market. The price of cocoa is multiplying all of the time and the demand for it is increasing. It reached a time that the Food and Agriculture Organisation (FAO) of the United Nations made a statement about three years ago that there will soon be shortage of cocoa in the world.
“Not because people are not producing cocoa, but because more and more people are eating cocoa. In developed world, doctors are telling people to eat at least a little cocoa in a day. Under the impact of that awareness, cocoa is just sky-rocketing. Nigeria can do a lot with cocoa. Nigeria can do a lot with palm oil. Malaysia’s economy now depends mostly on palm oil. Malaysia is the largest exporter of palm oil to the world economy. They came to Nigeria to acquire the first seedling of palm oil trees. Today, they are the largest exporter of palm oil in the world. And we have more land than they have. We have better palm oil trees than they do.
“Our groundnut is still a highly desired and highly wanted product in the world. Instead of spending money looking for fossil fuel in the North, we should be pouring money into the hands of the farmers to produce groundnuts again. Are you aware that we are now able to export large amount of yam, gari, yam flour to America and Europe? Agriculture is no longer the degraded occupation we think it is. It has become one of the ways to build the economy of a country.
“For industry, instead of spending money to look for oil, we should spend money priming up our supply of electricity. Without it, no industrialization is possible. Small-scale business cannot start because there is no reliable supply of electricity. Even the bigger companies are now beginning to realise that instead of spending money to buy high powered generators, they can start their business in another country where they don’t need all of that. So, businesses are opting out of Nigeria.”
He said that the action of the government was out of tune with the reality in the knowledge-based global economy, warning that bleak future awaits the nation, if effort is not made to key into the global trend.
He said: “If they talk about diversification, they are talking about it because it is fashionable to talk about it. It is not because they want to do it. They believe so much in oil because oil has been pouring so much money out without sweat. Oil has become the god of the Nigerian economy. If they are looking for oil in the North by spending the money we make from oil in the South, is that diversification? If they are spending large amount of money we make from oil to go and look for oil where there is no oil, is that diversification? Are they aware of what is happening in the world? People are moving away from fossil fuel to other areas of energy.
“Most countries are now investing heavily on wind and solar energies, but they are there busy prospecting for oil when most advanced economies are issuing notices that very soon they will refuse to license companies that produce cars that depend on fossil fuel. Very soon, the machines that use oil will no longer be there. Instead of gas stations, you will have stations that top and recharge your cars. Are they aware of all those things? Are they aware that cars that depend on batteries are already driving in some countries? Are they aware that even if they multiply the amount of oil Nigeria produces, a time will come when it will mean nothing to Nigerians because there will be nobody to buy it any longer?”
Also speaking in the same vein, Senator Gbenga Kaka, said that diversification remained the only available option to salvage Nigeria’s economy.
“It is a must we diversify. We have no alternative to diversification. They have been mouthing it since our independence. Unfortunately, rather than growing the economy by focusing on diversification, we keep on regressing. We discovered oil in very small quantity before independence. As we were getting out of the civil war, oil prospecting became heightened. Money was coming in. It got to a stage that Yakubu Gowon, the military Head of State then, said his problem was not lack of money, but how to spend it. That was the time diversification would have been put in place. But we allowed IMF, World Bank to dictate to us. They told us that we could diversify by going peasant farming, whereas those advanced countries were going for plantation farming. Little per cent of their population engaged in mechanized agriculture with the advantage of economy of scale,” he said.
He lamented the alarming high rate of out of school children, stressing the importance of education as the cornerstone for development.
“We have more 10 million Nigerian children outside the school system. When they grow up, can those ones adopt any technology?
“We are still not getting our priorities right. And we need to get it right. It is then that our diversification can become meaningful. You heard what is going on in Zamfara where gold and other minerals are being crudely explored without any money accruing to the Federal Government. Can we say that one is diversification? We have greed elite who institute those activities. So, if we must do diversification, it must be a meaningful one with proper environmental assessment taking into consideration. As far as diversification is concerned, we still have a long way to go and education remains the bedrock.
“We need to reorder our priorities. The time for crude oil is up and the alternative the whole world is looking for cannot be sought without education. But we are complacent. I am a livestock man. I will love it, if all our money is poured on livestock. Within the livestock we have other animals other than cattle. We should pay attention to all of them because they are alternative source of revenue and animal protein. Priority should be given to agriculture and livestock as alternative revenue source for government,” he added.
On his own part, a former Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Denzil Amagbe Kentebe, an architect, suggested investment in agriculture, technology and tourism development as money spinning ventures, warning that the era of oil was over.
He argued: “Prospecting for oil at this time is a lazy man’s attitude. It shows the government is not serious. The era of oil is over. All other countries in the world are moving away from oil. Even Dubai in the United Arab Emirate is moving away from oil. Dubai makes more money from tourism than oil. Why are we not moving in that direction? Why are we moving backward trying to prospect for oil because it is the easiest thing to do.
“I think it is just a way of spending what they are getting because the government has no focus. There a lot of investments that could go into technology, there are lots of investments that could go into other areas of the economy to diversify so that everybody can stay where they are and begin to look for success story in their different regions. There are a lot of things to do to in the agricultural sector to diversify the economy.”
He advocated a return to the regional system of government where each region developed at its own pace.
“What the government is doing now does not help the country. Let the government leave each region alone so that they can decide how they want to run their regional economy. That is what we need to do as a country. We are going backward, instead of going forward. And that should be discouraged.
“But they are so bent on riding on the back of Niger Delta by spending the money they are getting from the region to do the investigation is the Chad Basin. Secondly, if they have not been able to clean up Ogoni land in the Niger Delta region that has been producing oil all these years, what do they want to do when they find oil in other regions? Are they going to devastate the environment there also? Are they going to destroy the little they are getting in the name of oil? If I were the people of that region, I will stop the government from searching for oil because it will not bring any good to the region,” he said.
Also speaking, a political economist and former Commissioner for Information in Rivers State, Dr Austin Tam George, described the investment in oil prospecting as a contradiction of the policy of the government.
“I think it is a contradiction of the government’s own policy to broaden the economic base of the country. The billions of naira spent on these fruitless explorations for oil in the North should be should be spent on education and in providing good quality health care. There should also be a dedicated fund for research and development in renewable energy sources, because that is the future of energy,” he declared.