With imminent recession staring Nigeria in the face, which the underlying cause is largely the current poor performance of crude oil in the international market occasioned by the advent of Covid-19 pandemic, the questions on the lips of not few Nigerians are: how far can the country go with its dependence solely on oil? How prepared is the country for another recession which it exited barely three years ago?
Time was when the fear revolved around oil being a wasting asset which may dry up any time. Projections were rife then as to around what year that apocalypse would take place. I can recall vividly that 2030 – just ten years away – was one of the years brandied about then. These projections were at their best in the 1980s. Today, the apprehension has shifted to the importance of oil in the future. How relevant will it continue to be in the face of conscious efforts by advanced economies (the major consumers of fossil fuel) to save the environment via policies on climate change? The prevailing sentiment now is that the environment must be returned to its green nature! The reality of electric vehicles and even the discovery of shale oil by America were not on the cards about a decade ago.
Diversify the Nigerian economy – that has been the slogan for heaven knows since when. Successive governments including those anchored by the Military found that a very favourite phraseology. With humongous amount of money derived from the oil sector, one is still at a loss as to why investing in other promising sectors was such a difficult task considering both the acknowledged transient nature of oil itself and the volatility of the sector in which it is situated. Even to refine the crude has been a major issue. Other oil producing countries had refineries built outside their jurisdictions that generate foreign earnings for them but Nigeria couldn’t maintain the ones within its territory! It continues to engage in endless turn around maintenance of its refineries and importation of refined crude with all associated corruption.
As if Nigeria has not had enough of its oil induced stupor, it has engaged and still engaging in search of oil in the deserts. A lot of billions of naira has been committed in the venture at a time the agricultural and mining sectors are yearning for attention and the world’s attention is shifting from fossil fuel.
Yes, post COVID-19 will be an interesting era for Nigeria. It’ll be somewhat a watershed for the economy, only if the right lessons have been learnt and the will to break away from the past enforced. What bitter lesson is there for one to imbibe when a country depends solely on one product that it can’t sell even below cost of production?
Granted, some giants strides have been recorded in the agricultural sector, courtesy of Central Bank of Nigeria’s (CBN’s) massive interventions, especially in the area of rice production which hitherto gulped tremendous foreign exchange for its importation, nevertheless, a lot of gaps still exist in the entire agricultural value chain. The issue of turning raw materials into finished products via establishment of vital industries is still begging for attention. Exporting mainly raw materials as is presently the case will never make the desired impact. There must be a paradigm shift in the formulation and implementation of agricultural policies in the country.
In a world governed by knowledge and skills, especially in the information and technology field, the country’s impact is yet to be felt. While a lot of countries rake in billions of dollars through this avenue annually, Nigeria appears to be a trillion years behind, no thanks to its wobbling education system. Strikes in the tertiary institutions are now commonplace and have since redefined the education system. If a country like India – a developing economy like Nigeria – can rake in billion yearly exporting its skilled manpower overseas, what is holding Nigeria back?
With advent of Covid-19, there is no denying the fact any longer that an emergency should be declared on the education and health sectors. The former apart from reversing the current trend of expending humongous scarce foreign exchange on education tuitions abroad for privileged Nigerians, will make skilled Nigerians employable abroad and thus helping in repatriating the much-desired diaspora fund. The latter will no doubt save equally humongous resources on medical tourism currently being expended. Who says that an improved health sector in Nigeria will not attract foreigners here? It has existed before and could still be replicated. In the 1970s, the Royal family of Saudi Arabia Kingdom used to frequent the University College Hospital (UCH), Ibadan on medical tourism!
Emeka Okolo
Dr. Okolo is a Chartered Stockbroker and Management Consultant based in Lagos.
