The debate around Nigeria’s oil, discovered several decades ago, is never-ending. Speaker Abbas Tajudeen, Ph.D., GCON, added his voice to the conversation on Monday, December 30, 2024, when he delivered the 14th Convocation Lecture of Al-Hikmah University, Ilorin.
As an academic, Speaker Abbas articulated and delivered the hour-long lecture with great depth and insight. With a Ph.D. in Business Management, he left no one in doubt that he was more than capable of handling the topic: ‘Beyond Oil: Exploring Alternative Revenue Potentials for Economic Growth and Sustainable Development in Nigeria.’
Setting the ball rolling, the Speaker pointed out that the topic “speaks to one of the most pressing challenges confronting our nation,” arguing that, “As we reflect on the past decades of Nigeria’s economic trajectory, it becomes evident that our over-reliance on oil revenue has left us vulnerable to global market fluctuations, environmental degradation, and economic instability.”
The thrust of the speaker’s lecture was how Nigeria could harness its abundant resources and human capital to diversify our economy and ensure long-term growth and sustainability.
Noting that the urgency of the discussion could not be overstated, Speaker Abbas averred that with dwindling oil revenues, global shifts toward renewable energy, and the increasing need for job creation, it is imperative that Nigeria chart a new course for economic transformation. This, he asserted, requires deliberate efforts to unlock the potential of other sectors.
Amidst intermittent cheers, and at some point a standing ovation, the Speaker drove home his point. He submitted that the discovery of oil in Nigeria remains a historical watershed in its development process and has undeniably impacted hugely on the country’s socio-economic and political landscape.
Expectedly, the speaker stated, the impact of oil grew exponentially over the years to become a priceless commodity—the goose that lays the golden egg.
However, the performance of the oil sector, which has long been the principal source of revenue, has steadily declined. This decline has raised mounting concerns regarding its impact on Nigeria’s economic development. The repercussions are evident in the escalating budget deficit, extensive domestic and international borrowings to address these deficits, and the widening disparities in infrastructural development.
For about an hour, the audience, which comprised reputable professors, some of whom are serving and past vice chancellors, was held spellbound.
Moving on, Speaker Abbas did not mince words when he said the discovery of oil in Oloibiri, Bayelsa State, in 1956 marked a fundamental shift in Nigeria’s economic focus. Prior to this, he asserted, agriculture was the backbone of the economy, contributing significantly to employment and export revenues. But the oil boom of the 1970s led to a rapid transition towards an oil-centric economy.
Going down memory lane, the speaker said the newfound oil wealth resulted in the neglect of the agricultural sector and other non-oil industries, fostering an economic structure heavily reliant on petroleum exports.
He dotted his lecture with real statistics, which pointed to the issue at hand. He said that despite the economic growth witnessed during the oil boom, allowing the country to undertake large-scale infrastructure projects such as the construction of the Federal Capital Territory, Abuja, and the Ajaokuta Steel Company, a downturn set in during the 1980s when oil prices collapsed, leading to a sharp fall in GDP from $34.6 billion in 1980 to $23.4 billion in 1990.
According to the Speaker, Nigeria’s heavy reliance on oil has presented several economic, environmental, and strategic challenges.
On the economic front, the country faces significant volatility due to fluctuations in global oil prices. The volatility has resulted in shortfalls in fiscal revenues, forcing Nigeria into borrowing to finance deficits, thereby increasing its debt burden.
Environmentally, the speaker maintained that oil dependency has contributed to severe degradation. The Niger Delta region, where most of Nigeria’s oil production occurs, has experienced widespread environmental damage caused by oil spills and gas flaring.
That’s not all. The speaker submitted that Nigeria faces the strategic challenge of adapting to the global transition towards renewable energy sources. As the world moves to reduce carbon emissions and adopt cleaner energy technologies, the demand for fossil fuels is expected to decline. This transition poses a long-term risk to Nigeria’s oil revenues and economic stability.
Therefore, Speaker Abbas believes that without a robust strategy for economic diversification, Nigeria may struggle to remain competitive in a changing global energy market. Addressing these challenges requires coordinated efforts to enhance economic resilience, protect the environment, and position Nigeria for sustainable growth in a low-carbon future.
Citing China, which leads the transition towards renewable and sustainable energy sources, setting ambitious targets to phase out fossil fuels and embrace cleaner alternatives, Speaker Abbas noted that the Asian country has already surpassed its 2030 target of 1,200 gigawatts six years ahead of schedule.
But what is our continent, Africa, up to? The speaker submitted that the African continent is also making strides in adopting renewable energy. As of 2023, South Africa led the continent with 10.62 gigawatts of renewable energy capacity. Morocco has invested heavily in solar and wind energy, including the Noor Ouarzazate Solar Complex, one of the largest in the world. Kenya has focused on geothermal energy, which now accounts for about 50 percent of its electricity generation.
Speaker Abbas affirmed that in alignment with global commitments, Nigeria ratified the Paris Agreement in 2017, pledging a 20 percent unconditional reduction in greenhouse gas emissions by 2030, with a potential 45 percent reduction conditional on international support. To achieve these targets, Nigeria’s Energy Transition Plan outlines strategies for decarbonising the energy sector and attaining net-zero emissions by 2060. Key focus areas include integrating renewable energy sources, improving energy efficiency, and adopting cleaner technologies.
The speaker declared further that with a population exceeding 200 million and projected to become the third largest globally by 2050, Nigeria faces significant challenges related to resources, infrastructure, and employment.
It was in recognition of these challenges that Nigeria has pursued economic diversification for over 30 years to reduce its dependence on oil revenues through policies and programmes such as the Structural Adjustment Programme (SAP), National Economic Empowerment Development Strategy (NEEDS), Vision 20:2020, National Industrial Revolution Plan (NIRP), among others.
The speaker informed the large audience that President Bola Ahmed Tinubu’s administration has prioritised economic diversification through bold reforms, including removing fuel subsidies and implementing the Presidential Initiative on Compressed Natural Gas (CNG). The administration’s tax reform programme aims to improve Nigeria’s tax-to-GDP ratio, currently at 10.9 percent, by streamlining administration and broadening the tax base.
So, what are the potential sectors for diversification? The Speaker provided some to include agriculture, solid minerals/mining, manufacturing and industrialisation, ICT and the digital economy, technology and innovation in economic transformation, and the creative industry and tourism.
The speaker argued that for effective diversification in Nigeria, certain strategies should be adopted. They include a robust and consistent policy framework; infrastructure development; human capital development, which includes education and skills acquisition; research and development; and public-private partnerships (PPPs).
As the head of the Green Chamber, the Speaker dedicated ample space in the lecture to highlight the role of the Parliament in economic diversification.
First, he spoke about legislative oversight, which is a fundamental mechanism for ensuring accountability in economic diversification projects.
He noted that the 10th House of Representatives, tagged the “People’s House,” has demonstrated a strong commitment to addressing economic challenges through its legislative agenda. The agenda prioritises unlocking economic growth and developing Nigeria’s vast human and natural resources, emphasising legislative reforms and strategic oversight to support diversification.
Another area that the Parliament plays a vital role in for economic diversification is policy formulation and legislation, crafting and enacting laws that create an enabling environment for diversification.
There is also the area of appropriation and budgeting, which allows Parliament to allocate resources to ensure that funding aligns with national priorities.
Recognising the need for economic restructuring, the 10 House has supported legislation to reduce dependence on oil revenues, enhance agricultural productivity, and promote industrialisation. Also, the Speaker held that effective implementation of diversification strategies requires continuous legislative monitoring.
In addition to its formal legislative functions, parliament serves as a platform for advocacy and representation. Legislators amplify the voices of stakeholders, including local businesses, workers, and civil society groups, in shaping policies, argued the Speaker.
Diversification, especially in Nigeria, comes with its challenges too. Institutional weaknesses, infrastructural deficits, and global economic pressures impede economic diversification in Nigeria, the speaker submitted.
But such challenges can be mitigated through governance reforms, stakeholder engagements, and long-term planning.
In the end, everyone left the hall convinced that indeed, Speaker Abbas Tajudeen did justice to the topic. It was the last official function the Speaker performed in the year 2024. What a way to end the year!
Krishi is the special adviser on media and publicity to the Speaker, House of Representatives.
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
