• Friday, March 29, 2024
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BusinessDay

God, Oil and Nigeria

McKinsey projects growth for Seplat, others as Africa’s energy demand soar

Recently, the Minister of State for Petroleum had cause to lament the perverse linkage between oil and development in Africa. He was of the view that, rather than develop Nigeria and other African countries, oil paradoxically enough has turned out to be a harbinger of their underdevelopment.

How did Nigeria and other African countries come to this sorry pass? By way of response, it is easy to appreciate that things were not always like this.

There was a great deal of optimism in the land, especially during the so-called oil boom. Even our foreign policy acquired a new lexicon-dynamic. It was not uncommon in those days for our leaders and even journalists as well as scholars to talk in euphoric terms about Nigeria’s dynamic foreign policy.

But even in the midst of this din and euphoria, there were counter voices which cautioned that every boom carries with it, the antithesis of doom.

Two of the oppositional scholars come to mind here. On one hand, was a Bolaji Akinyemi who was the Director-General of the Nigerian Institute of International Affairs (NIIA). He was of the view that Nigeria has now acquired a dynamic foreign policy, and was already coming into her own in world politics.

On the other hand, voices ably led by Olajide Aluko were of the perspective that the economy was still primitive, and as such the foundation of a dynamic foreign policy was not there. Matters were certainly not helped by two factors. One, there was the intervention by the prominent scholar, Ali Mazrui, who described Nigeria in rather optimistic terms. According to him, a new power had now emerged in Africa. This new power, according to him, was able to interpose itself between the two superpowers.

Some heady stuff there. Understandably, we became swollen-headed. And this attitude ties in neatly with the second factor which revolved around the then evolving realities in Southern Africa. Along with the Nigerian people, the Nigerian State threw itself headlong into the struggle in Southern Africa. Money, remember was no object. The petrodollars flowed in and with it, we took on the anti-apartheid cause.

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The moral fervor with which we pursued the anti-apartheid struggle was such that it was conveniently forgotten that a very close look revealed that there was a hint of hypocrisy in our stance. For in a broad sense, the brutalizing realities in South Africa were similar to those in Nigeria, save for the fact that one was rooted in racism, while the other was rooted in class.

Gradually and in the course of time, the scales started to fall from our eyes. It dawned on us that oil, rather than serve as an instrument of development, is in fact an instrument of underdevelopment.

One way in which this came about was the link between oil and the military. The motivation for coups transcended the visible reformatory instincts of coupists. Rather, the aim of the ambitious soldier was self-serving. It was to have unfettered access to the vast and providential oil revenues.

Looking back now, what we had on our hands was a toxic mix: oil and the military. The immediate foregoing has been well articulated and theorized by a scholar, Terisa Turner. According to her, such is the rentier status of the Nigerian state, that it was prone to instability and coups, courtesy of oil.

And indeed, as the nation rejoiced way back in 1979 at the onset of civilian rule, Turner saw the issue in dark terms. She made the shocking revelation that everything will soon go up in smoke. In one of her scholarly pieces, Turner was of the ominous view that, with the impending return of Nigeria to civilian rule, there would be more struggles for the petrodollars and in essence, there would be a rapid return to military rule. This intellectual cum prophetic insight was amply consummated in 1983, some four years later.

Meanwhile, in the oil industry itself, a lot of people lost sight of the fact that, despite the seemingly vast oil revenues, Nigeria was mainly confined to the upstream phase of the oil industry. But it was not obvious then, since the proceeds from crude oil alone were enough to fuel our import needs. And when we became short of money as it often happened, we were encouraged to get into debt. Then, the seductive slogan in intellectual and policy circles was that as a country, we were under-borrowed.

Thus, oil led us into; military rule and then the debt trap which in varying ways subsists to date. Whereas if we had taken other routes, oil would easily have served as a basis for development. This is because, what we should have done, was to put in place viable contraptions like petrochemicals and refineries. With the former and properly planned, we would have been able to delink from our helpless dependence on imports. Rather, we would have become something of an exportation hub to neighbouring countries which would have stretched from the Gambia to Cameroon.

And with viable refineries, we would not be in this tragic bind of subsidy. It is a tragedy in which as the oil price goes up, we have come into more revenues. But the downside is that the pump price of PMS goes up since we lack refineries. If we were to feed our homegrown refineries with the crude stuff at relatively low prices, then we would have insulated the populace from the cuts and thrusts, as well as the consequences of oil price fluctuations.

The tragedy becomes deepened by the fact that it is something of a no-win situation for the Nigerian people. When the oil price goes down there is trouble. When it goes up there is also trouble.

The cold comfort that one can derive from all of the foregoing is that some form of inevitability is built into this scenario. And here, may as well call on another scholar, a Norwegian-American, Terry Lyn Karl. She was of the view that the structures which receive oil in any given social formation will determine the outcomes.

In Nigeria’s case, the structures which received were, colonial, rudimentary, and largely devoid of the relevant technology. And to these extents, with oil, Nigeria simply and unwittingly perhaps, entered into one long corridor of underdevelopment.

The grim outlook seems to have been worsened by the fact that, the world is currently in a transition from the oil age to the emergent era of clean cum green energy. And, this is where it can be said, without being blasphemous, that God is a Nigerian. The Divine has provided for us even at this new terminus. The country is endowed with ample gas reserves- which can easily serve as our mainstay in the new energy dispensation. Very few countries are that lucky.

But there is a downside again. This is owed to the fact that, even in the new age, inclement features like misgovernance and bad leadership can easily turn our gas-fuelled dream into another nightmare.