Former Vice President, Atiku Abubakar has stated that the era of oil is gone and it is time for the nation to face the fact that reliance on crude oil is failing Nigeria and other mono-product economy crude oil exporters, adding that this is the time for Nigeria and her contemporaries to cure their addiction to sweet crude.
Atiku in a write-up on ‘How to pull Nigeria from the brink’, released on Thursday, stated that for far too long, Nigeria has grown high on its own supply to the extent that it has neglected almost every other sector of its economy, adding that the country has so much crude and no one to buy it, nowhere to store it and little idea what to do with it.
According to him, the challenges that are already engulfing the oil and gas sector will continue to plague that industry for at least the rest of the year and may reach apocalyptic levels sooner than expected.
He said, “As at today, Nigeria is pricing its very low sulphur sweet crude at $10 per barrel, yet buyers are balking. Our sweet crude is becoming a little bitter. Three years ago, I had also alerted that the “crude thinking” promoted by our dependence on crude oil will lead to a rude shock.
“If you are still talking about oil, you are in the past. As far as I am concerned, the era of oil is gone. It is crude thinking to continue to talk and base development projections on crude oil. This present rude awakening should be seen as a blessing in disguise — a blessing that compels us to take those drastic actions that will free us from the crude oil trap.
“Now is the time for Nigeria to make those hard decisions it has postponed for far too long otherwise the alternative is an apocalyptic scenario we would rather not entertain. We must, as nation, begin to invest our resources wisely in order to maximise dividends. We must liberalise our land tenure system to make it possible and easy for some of the 27 million unemployed Nigerians to become farmers, even as sharecroppers.
“Nigeria is at the lowest point we have ever been as a nation. We have over indulged on seemingly cheap loans and have quadrupled our foreign debt in just four years. Taking more of such loans will just sink our country deeper and deeper into a quagmire. We must cut our coat, not according to our size, but according to our cloth.
“Our Presidential Air Fleet of almost 10 planes should go. Our jumbo budgets for our legislature must go. The planned $100 million renovation of our Parliament must be cancelled. We cannot be funding non-necessities with debt and not expect our economy to collapse. Our civil servants must come to the realisation that Nigeria cannot sustain its size and profligacy. The same cost saving measures must be adopted by the states and councils government.”
Atiku reiterated that Nigeria needs to diversify its economy though it is easier said than done, adding that this does not mean it is an impossible task. He explained that prior to Nigeria’s October 1, 1960 independence, not only was it a nation self-reliant in food production, but it also exported food to other countries, earning precious foreign exchange in the process.
“How did our country go from being a net exporter of agricultural products to a net importer of food products? How did we go from a country that could feed itself to one that desperately depends on foreign imports for survival? The answer to these questions is leadership focus. During elections, Nigerian politicians spend a significant amount of their campaign time discussing how they will manage the nation’s resources. However, the fundamental difference between a leader and a manager is that while a manager focuses on managing existing resources, a leader sets out a creative vision which the country must follow to chart a course to political and socio-economic greatness,” he said.
The former vice president explained that it is abundantly clear that Nigeria is never going to become an industrialised nation by selling more oil, even if the oil market recovers, pointing at lessons from Venezuela’s current predicament and Saudi Arabia’s vision to diversify from its dependence on oil despite its huge reserves.
He said oil economies need to learn a thing or two about economic diversification from the United Arab Emirates which despite being a young nation, has managed to diversify its economy from an almost complete reliance on oil in the 1970s, to a country where 72 per cent of the GDP comes from the non-oil sectors of the economy such as aviation, tourism and services sectors.
“In Nigeria, our diversification should embrace agriculture as the primary sector earmarked for development, because agriculture, as a low hanging fruit, is key to ensuring food subsistence, and with the recent signing of the African Continental Free Trade Area agreement (AFCTA), which favours Nigeria’s economy greatly. Nigeria can take advantage of this to become an agricultural powerhouse in Africa. Africa has the lowest intra-regional trade amongst the seven continents. Indeed, 68 per cent of Europe’s trade is within the continent. However, Africa does more trade with non-African nations than we do amongst each other. Our intra-continental trade is an abysmal 18 per cent. This must change and Nigeria is key to altering this sad state of affairs.
“With about 60 per cent of its land assessed as arable, I truly believe that Nigeria is capable of becoming the food basket of the rest of Africa, and in the process, it can capture a sizable portion of the $48 billion that goes towards food imports in Africa. That money should be circulating within Africa, strengthening our currencies, growing our GDPs and enriching our people,” he stated.
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