Thursday, 5 September 2013

Speech: Before The Oil Festival Ends

(Being  paper delivered by Solomon Okedara Esq. at the 2013 Nigerian Diaspora Youth Leadership Summit with the theme “Nigeria beyond Oil: Opportunities in Enterprise and Development” held at the London School of Economics and Political Science (LSE) London on 4th and 5th September,2013. Okedara can be  reached through

The Masquerades’ festival known as “Odun Egungun” among the Yoruba people of the South West of Nigeria is a popular traditional festival, largely characterized by peerless feasting, dancing, drumming, ahead-of-class costuming, spontaneous distribution of farm produce and other festival “largesse”. It is one celebration that attracts natives from wherever they are scattered all around the globe and brings them together despite their personal and social differences. It is a moment when people’s attention would be drawn away from other pressing realities of their lives (personal and communal); worries are pushed aside, hurts are hidden under transient euphoria, provocative truths are post-dated, after all, “everyone must be happy” It is always a celebration of the people, by the people and for the people. But the truth of it all is that the festival is only seasonal and after a few days of jamboree and the transient wingding, personal hurts return to their owners, worries are back from where they left  for sabbatical and post dated truths return from exile, in much  greater provocative expressions, all because the festival has ended! 

Sure, no one wants the festival to end as most people are often enveloped in a utopia of sort. But there is always a warning from the declining sounds of the drums and the gongs signaling the approaching end of the festival, because, the festival must end. In the same manner, the warnings of approaching end of the 57-year old “festival of oil” of the most populous nation of Africa, have been sounding loud and clear to the ears of her teeming populace. In a recent report, a group of experts declared that Nigeria’s oil reserves may dry up in 35 years and this was later echoed by President Jonathan at an event commissioning a new Cement plant in Ewekoro, Ogun State, Nigeria in 2011. More specifically, the Managing Director of Nigerian Petroleum Development Company, Victor Briggs, while serving as General Manager, Planning, National Petroleum Investment Management Services (NAPIMS) in 2010 warned that Nigeria may run out of oil soon and we may no longer be on the list of OPEC members again. If these predictions were to be true, it then underscores the import of the aphorism that “Everyday is not Christmas and the Masquerades’ festival must end someday

However, from my vantage point, the imminent end of our “festival of oil” does not have to be the literal drying up of the nation’s “black gold” that currently accounts for over 90% of our exports and over 70% of the consolidated government revenue, but the resultant insufficiency of the proceeds of oil to meet the needs of the nation’s constantly growing population in the near future. The alleged insufficiency is predicted on three grounds. Firstly, with the current population of the country roughly put at around 160 Million, the nation is importing 2.5 Million tons of milled rice annually and expends a sum of about N1.3 Trillion on food imports annually, with the said figure noted to have been rising by 11% every year. With the projected population of Nigeria in 20 years, 35 Million tons of rice will then be imported annually. I frankly hold that even with the current value of our “petro-naira”, we are not poised to foot the bill for such huge food imports. 

Secondly, United States of America which hitherto has been the biggest buyer of Nigeria’s crude oil has recently reduced the volume of its patronage for the obvious reason. The United States now holds the world’s largest deposits of oil shale, a kerogen-containing rock which can be extracted and processed into usable transportation fuel. The oil shale deposits found on federal lands in Colorado, Utah and Wyoming in United States contain an estimated 4.285 trillion barrels of oil in place according to the U.S. Geological Survey — enough to sustain America’s fuel needs for over a century. In the words of Roger Day, Vice President for operations for American Shale Oil (AMSO) "In the past 100 years — in all of human history -- we have consumed 1 trillion barrels of oil. There are several times that much here," This practically accounts for the reason why America’s imports to Nigeria slid to 194,000 barrels per day in February 2013 from average of about 376,000 barrels per day that it used to be. Even though Nigeria seems to have found a replacement for United States in China and India, it is not certain, how far the substitute may be sustained. It is however advisable to prepare for a slide in sales. 

Lastly, there is now a stiff competition for Nigeria, as Angola is now poised to overtake Nigeria as the continent’s largest producer of crude oil as the Southern African country produced 1.87 Million barrels per day in May, 2013 as Nigeria also produced. It is also noteworthy that Ghana, Kenya, Uganda, Cameroun, Chad and some other nations have also found oil thereby making the competition stiffer. Distilling from the above, it therefore requires no soothe-sayer to predict an inevitable end to the nation’s hitherto celebrated “festival of oil” Like I said earlier, whether now or later, the festival must come to an end.
If the festival must truly come to an end, what then should we do? The only answer is “DIVERSIFY! The following tips constitute the fulcrum upon which Nigeria’s quest to a successful economic diversification should rest. Please note however, that this piece only serves as basic guide, but for a more detailed read showing rigorous analyses of workable policies, my latest work Nigeria: The Roadmap to Economic Diversification may be consulted.
Economic diversification is generally defined as the process in which the economy becomes more diverse in terms of goods and services it produces. This is distinguishable from Export diversification which portends deliberate policies intended to change the shares of commodities in the existing export mix by introducing new products in the export portfolio, and/or breaking into new geographical markets. A successful diversification plan requires firm political commitment, consistent public policies and substantial financial resources. Of course, many challenges arise when pursuing a diversification scheme. It is often necessary to make significant investments in human resources and infrastructure to support economic sectors and activities such as value-addition in commodities. These are long-term endeavours that need government’s commitment and political will, not to mention major capital investments.

If an economic diversification scheme is vigorously and sincerely pursued, benefits accruing to it include less exposure to external shocks, increase in trade, higher productivity of capital and labour, better regional economic integration, appreciable reduction of poverty and promotion of human and social development. Success stories of economic diversification from resource-dependency include those of Malaysia, Chile, Indonesia, Kenyan, South Africa and Tunisia.
To appreciate huge bounties that await us if we give diversification a chance, we should consider the following facts:

UNESCO recently declared that Nollywood (Nigeria’s movie industry) has the largest production of films in the world; no doubt, this industry is often regarded as one of Nigeria’s largest exports. But so pathetically, the movie industry is largely underfunded, as the entire Nigeria’s movie industry is valued at $250 Million, whilst the total budget of “Avatar” a recent American movie, was $280 Million.  Avatar reportedly made a huge figure of $2,782,275,172 at the box office, while all the Nigerian movies since 1992 could not boast of the figure attributed to Avatar. You may contest the worth of this industry but one thing no one can contest is the economic promises of Nollywood if properly funded.

The Computer Village in Ikeja, Lagos State, according to the Minister for Information and Communication Technology, Mrs Omobola Johnson generates about USD2 Billion to the nation’s economy every year and today constitutes an ICT hub for the West African states, yet, this hub is yet to be fully developed.

Of course, much need not be said about the potentials of our first love- Agriculture, which at independence accounted for over 80% of the nation’s exports. There are proofs that other sectors like Manufacturing and Sports are limitlessly promising.

With all of these, does it appear we have much to benefit by giving diversification a chance or we should rather continue in our age-long “dancing and feasting” that our “festival of oil” has brought and await the sudden end of the festival? As I pause my much believed diversification crusade here, the warning words of the Peak oil poet become so apt, when he, like the Prophet in the wilderness, declared in his poem “When the future comes a knockin” that:

when the future comes a knockin'
when tomorrow's at our door
what today we all believe in
will be what we all abhor
  I write these words in disbelief
 that I have come to this
  that I look out with fear and grief
'cause I hear the future knockin'
'cause the future is a knockin'
and tomorrow's at our door
if we cannot save ourselves from us
what worth is all our lore?

1 comment:

Please restrict your comment to the subject matter.