Against the backdrop of growing economic hardship occasioned by falling crude oil prices and vandalism of oil installations in the Niger Delta, experts have declared that the black gold has become a curse to Nigeria rather than a blessing.
According to Professors Adeola Adenikinju, Director, Centre for Petroleum, Energy Economics and Law, University of Ibadan and Pat Utomi, a renowned scholar and economics expert, failure of the nation to refinance the economic trappings of oil and develop other sectors of the economy, especially agriculture, has turned it into a curse.
Speaking on what has come to be known as the curse of oil, Professor Adenikinju said although crude oil ought to be a blessing, it became a curse to the country because of its failure to do what is right with it.
According to him, “Oil provided the resources that financed the Second, Third and Fourth National Development Plans. Under these plans, the number of tertiary institutions rose, roads and bridges constructed across the country increased. Nigeria’s infrastructure such as power plants, refineries, Iron and steel company were built. Modern cities emerged and so on and so forth. “However, oil came with its own disease – the Dutch disease. This disease could have been prevented or kept at the level where it could not pose serious developmental challenge to our development. We failed to do the needful, prevent the disease and therefore suffered the consequences of our ignorance or preferably our indifference and carelessness.”
Expatiating on this, Adenikinju said “oil has its rules that must not be violated in order to derive maximum benefit from it.”
The rules, according to him, include building strong institutions to contain the excesses of oil and its operators, protecting the real exchange rate, so that it does not penalise non-booming tradable sectors (like agriculture and manufacturing), using the earnings from oil to develop infrastructure and create savings for the future, integrating the oil sector with the rest of the economy by ensuring that petroleum is processed locally and vertically diversified as well as developing the oil sector as an enabler of development by emphasizing its contributions to value addition, rather than a mere revenue earner.