Five of Nigeria’s untapped resources can contribute $1trillion to the country’s gross domestic product (GDP), but poor regulatory and fiscal policies by successive governments keep the country poor.
Nigeria has a lot of untapped resources in agriculture/ food processing, extractive industry, real manufacturing, and ICT sectors, which if fully exploited can raise local outputs and GDP, boost employment, and strengthen the local currency, the Naira.
In the 1970s Nigeria had a prosperous, export-orientated mining industry. Besides, the country has one of the largest deposits of bitumen natural sands in the world. The estimated bitumen reserves are more than 42 billion barrels amounting to about $3,948billion.
Now, the question should be why then is Nigeria with its seemingly adequate resources still in this perilous economic state with untapped resources?
The reason is not far-fetched, Nigeria as a country is over-dependent on a mono foreign exchange earner, and has neglected the extractive and agricultural sectors, besides, inconsistency and fraudulent implementation of policies coupled with the rising foreign exchange rates, and large-scale insecurity across the country is responsible for its predicament.
Presently, revenue from crude oil is the dominant source of foreign exchange earner for Nigeria. Since the mid-1970s, oil has consistently accounted for approximately 95 per cent of the country’s foreign exchange earnings and 80 per cent of budgetary revenue.
This is pathetic taking into consideration that at independence, agriculture was a major dominating sector in Nigeria, contributing a large percentage of its foreign exchange earnings while it was largely self-sufficient in food production as well as having a respectable niche as a major exporter of a bouquet of cash crops ranging from groundnuts, palm oil, cocoa, to rubber, cotton, and hides and skin.
The dominance of agriculture then in the Nigerian economy was so huge that the sector not only catered for the 95 per cent of the food needs of Nigerians, it also contributed 64.1 per cent of the GDP and employed over 70 per cent of the Nigerian population. Besides, at that point, exports of agricultural products accounted for 80 per cent of the country’s foreign exchange earnings and 50 per cent of government revenue.
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Sylvester Okotie, a public affairs analyst, once pointed out that the oil boom of the 1970s changed everything for the Nigerian economy as it became overly dependent on oil for its foreign exchange earnings.
Which resulted in gross neglect of other foreign exchange sources, especially the agricultural sector of the economy, which was the major foreign exchange earner before oil came into the picture.
As it were, the reverse is the case. Foreign exchange earnings from agricultural cash crops and commodities exports have virtually dried up as the massive cultivation and production of cash crops like rubber from Delta State; groundnut, hides, and skin produced by the Northern region; cocoa and coffee from the Western region; and palm oil and kernels from the Eastern region of the country are almost gone. Now, the country has started importing some of them, even becoming a net importer in some cases. The major source of Nigeria’s foreign exchange earnings at independence now contributed a negligible amount to this source of revenue.
Besides, the country can no longer feed its increasingly large population as it depends largely on food imports, making food imports huge drains in the country’s foreign exchange earnings.
The foreign exchange supplied by the Central Bank of Nigeria (CBN) for the importation of food products into Nigeria has reportedly increased by 23.81 per cent to $1.04billion (N520billion) in the first half of this year, compared to the same period of 2020.
Lateef Adedimeji, a farmer in Kwara State, pointed out that even though the state government seems to be doing everything possible within its power to empower farmers and boost agricultural products no tangible result has been achieved because of the civil servants involved in the implementation of the policies. He pointed out even though the state government has gone as far as providing seed crops for rice farmers and financial incentives to help them get started, most of the incentives made available to farmers in Kwara State do not get to them as the civil servants in charge of the implementation diverts most of these resources.
Adedimeji maintained that some of these things will not get to the grass-root or the farmers. Those in authority will collect these things and sell them again at a very high price for their own income,
Reuben Chukwu, a cobbler in Aba, Abia State, shared his ugly experience when he said the state government is only promoting and reforming the manufacturing sectors on the pages of newspapers and in the broadcast houses.
Chukwu said, “There are practically no incentives from the state government, instead of support from the government we are loaded with taxes,”
Adewale Owolabi, a Medical Doctor cum livestock farmer, explained that Nigeria needs comprehensive policies for each key sector. Pointing out that Lagos State farmers are being trained and impacted to excel in their various fields with funds running to N600, 000 as start-up assistance, he believed that more could still be done.
According to Owolabi there is no regulated supply chain system in the country. This is affecting food sufficiency,
For made–in Nigeria products to thrive, manufacturers need to be protected and motivated. But this is not the case across the county as the manufacturers are left to the harsh operating environment and turbulence of the marketplace with no protection from any tier of government.
Moreover, the lack of political will to diversify the Nigerian economy is noticeable in how the government has treated the extractive industry largely seen as a foreign exchange spinner, if well handled.
Even though, the Federal Government has affirmed its commitment to the exploration and development of solid minerals and metals by approving N30billion financial intervention and prioritizing the exploitation of seven strategic minerals of vital importance to the economy, nothing solid has been achieved after many years of this decision. The seven natural resources: coal, bitumen, iron ore, barites, gold, and lead/zinc, which are available in ample qualities to sustain mining activities, are still largely untapped.
Nigeria is greatly endowed with a large deposit of natural bitumen with a reportedly proven reserve of about 42.47 billion tonnes of bitumen, a quantity which is estimated to be the second-largest in the world. Yet it has not been explored for economic purposes while the country’s bitumen import was around N300billion in August 2020 despite huge deposits.
So the quest for the diversification of the economy must start now. The various productive assets across the nation must start maximum production for the economy to be lifted out of its present sordid state. Running after Aboki FX without addressing the germane issues will rather compound the socio-economic situation.
