As the US stops importing Nigeria’s oil…

(By Sam Nda-Isaiah)

The era of oil as a major income earner for the country is gradually coming to an end. We must now cross over to the new era of multiple streams of income. But is Jonathan capable of taking us there? Or are we just waiting for the time we will be grouped with the world’s poorest countries like Haiti and Burundi?

A few months ago, the Arewa Consultative Forum (ACF) asked me to present a paper on the alternatives to crude oil for the north. My conclusion in the paper was that it was not just the north that needed to develop alternatives to oil; Nigeria as a country must conceive alternatives to oil as a major source of income very quickly. Crude oil as we know it today is technically finished. Not that our reserves or the world’s reserves have been depleted, but that almost every country in the world will soon be an oil producer. And the world is now moving to the era where oil producing nations will use their oil and gas resources to develop their own economies instead of exporting them. That is exactly what Malaysia, Indonesia and even the United States currently do. Even though these are oil producers, they no longer export oil. A few years ago, Africa had only five major oil producers: Nigeria, Algeria, Libya, Angola and Egypt. Today, there are more than 20 countries producing oil. These include Kenya, Uganda, Equatorial Guinea, Sao Tome & Principe, Sudan, South Sudan, Somalia, Ethiopia, Ghana, Congo, Cameroun, Tunisia, Cote d’Ivoire, Gabon, Niger Republic, Chad, Central African Republic, and Morocco. But that is even the least of our problems at the moment.

Nigeria’s major problem is that the biggest oil consumers now have their own oil. United States, which used to import 9 per cent of its oil needs from Nigeria, now virtually imports nothing. They pioneered the hydraulic fracking technology which now cost-effectively releases oil and gas from shales. Their shale gas technology has made the United States one of the largest producers of oil in the world. President Barack Obama pronounced it clearly during his state visit to some African countries last year: “We do not need Nigeria’s oil anymore.” When Obama made that statement, Jonathan’s aides declared that there were other countries like China that would readily take up whatever the US would not be buying. Not long after that dumb statement, it was discovered that China had the largest recoverable shale gas reserves in the world, far larger than that of the United States.

Last week, the Nigerian government announced that India has become Nigeria’s largest crude oil buyer, followed by China and then Malaysia. But the same way that the United States has stopped the imports of Nigeria’s oil, China and India and other Asian buyers will stop whenever they start taking full advantage of their own shale resources; the technology is now available to everyone. Besides, these Asian countries now import from Nigeria only because of the sanctions that used to be on Iran, from where they got their oil. The sanctions have now largely been lifted by the West.

The sum total of this is that Nigeria must quickly get other major sources of income. The Customs and Excise department has been doing very well in the last few months. It now generates nearly a trillion naira annually. There are many other government agencies that are supposed to be major revenue earners that many countries of the world depend on but not Nigeria because of corruption. That is for countries that are well run. The cumulative income that all such government agencies generate in Nigeria would be far more than what we currently get from oil if we were to run our country properly. Remember: the richest countries of the world are not the oil producers. The central banks of other countries are major revenue earners. So are others like the immigration department, ports authority, the tax agencies, maritime authorities, airports, and tollgates if we exclude corruption. We must also very urgently develop our solid mineral resources in every state of the federation. The mineral resources in every state must now be studiously developed and not the lip service that has been paid to its development and exploitation by successive governments. We must now do it as a matter of strategic national interest. We can start by declaring at least one strategic mineral in every state that must be developed. Many states will have several, of course. And, most importantly, Nigeria must start competing with Brazil, Thailand, Malaysia and Indonesia in agriculture. We must know that the serious nations of the world are in perpetual competition. Again, just like the case of minerals, we should start by declaring at least one strategic crop per state. We have all it takes. The next government after Jonathan must look into tourism as a major revenue earner. I say “after Jonathan” because there can be no tourism in a country with the kind of terrorism and so much disorder as we currently have, and we know Jonathan is totally incapable of addressing the current security situation. Tourism done very well will give us more revenue than what we currently get from oil.

The era of oil as a major income earner for the country is gradually coming to an end. We must now cross over to the new era of multiple streams of income. But is Jonathan capable of taking us there? Or are we just waiting for the time we will be grouped with the world’s poorest countries like Haiti and Burundi?

(Source: ScoopNG)

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