October 1, 2023


Tayo Oyekanmi.

Days ago, another round of fuel price hike was effected on Premium Motor Spirit. The retail price is now hovering between 160 and 168 naira. Of course, oil occupies a strategic position in the economy of Nigeria particularly within the context of its fiscal federalism. Though, the importance of the oil industry is not peculiar to Nigeria but a global phenomenon, hence the advent of Organization of Petroleum Exporting Countries (OPEC) and other cartel around the world.

As a renter state, Nigeria basically depends on regular collection of oil rents to meet contractual obligations. Paradoxically, while the oil revenue can be seen as the source of strength, it is also obviously becoming a source weakness. At the domestic level, series of contradictions have arisen as it were, due to the presence of oil in Nigeria. Though the oil over the years contributed to the expansion of some infrastructural and basic amenities. The channeling of oil wealth to unproductive sectors by succesive governments and the neglect of other sectors not forgetting the mind boggling corruption around the oil industry have essentially turned the country to a monoproduct economy. The effect of this has been constant resort to increase in pump price of petroleum products in the wake of any shortfall in government revenue, so as to augment revenue to meet her contractual obligations.

For all intents and purposes, can we truly say Nigeria is a rich country as a result of being blessed with oil? The problems associated with oil presence in Nigeria has become far too debilitating and defying all possible solutions thus far. The country has overtime bedeviled and ravaged with lack of initiative. Oil has become our greatest source of shortsightedness of shortcomings. Even with the richness of the so-called oil, we can only boasts of 4 state-owned refineries that are on complete shutdown as of the moment, whereas a single State of Texas in United States has more than 45 functioning refineries. While oil is serving as Nigeria’ eyes, closing sight to other lucrative ventures, Apple, the American Technology Company is worth $2 trillion. In 2019 fiscal year, the total earnings of Nigeria from oil exports was in the neighborhood of #4.6 trillion(about $12 billion) while Apple as a single entity paid corporate income taxes of about $10.481 billion (about #4 trillion) in the same fiscal year. Total collections for corporate income taxes in Nigeria in the same year was just #1.5 trillion. The total revised budget of Nigeria for this year is 10.8 trillion naira with borrowing as a biggest component. Again, is Oil really a blessing to Nigeria economy?

Oil wealth has turned our society into something else. It is the biggest source of corruption and other associated vices. The discovery of oil has made sectors and sub-sectors that would have added value to Nigeria suffered total neglect and abandonment. Nigeria must begin to pluck the fruit in front of our nose rather than chasing shadow and building our castle in the air around oil. So far, oil has not solved our multifaceted and intractable problems. It is even doubtful if it will in the nearest future. It will most likely be making billionaires out of some previledge few. Nigeria must strive to find her “true north” economically. For the umpteenth time, the surest way for Nigeria to get out of the woods is Agro Allied industries. One of the many money spinning Agricultural produce often neglected in Nigeria is Coconut. According to Nigeria Investment Promotion Commission and corroborated by the President, National Coconut Producers, Processors and Marketers Association of Nigeria, Mrs Nna Okoroji Coconut can generate over $400 billion to Nigeria economy on yearly basis. This was at the occasion of World Coconut Day on September 2nd. She said about 265 tons of Coconut are produced in Nigeria presently with Lagos accounting for about 70% of the figure. About 80% of the coconut that used in the country is imported even when the cost of importation is getting higher for a good we can readily produce without too much hassle. Coconut grow naturally on coastal terrain. What stops Nigeria and Nigerians in looking at the way of Coconut. If Kebbi State is doing well with rice production, Benue with Yam. Then Ogun and Lagos State should take the lead in the exploration of Coconut production because of their competitive advantage. The entire Maun, Agada and Tongeji belt of Ipokia Local Government Area, not forgetting the Ogun Water side axis can be a springboard for this.

Coconut is one of the greatest gifts of nature to man. It exibits a wide range of products, perhaps one of the most useful in the world. If countries like India, Indonesia, Philippines are not joking with production and extraction of coconut potentials, then Nigeria must look inward to advantage of what ordinarily they have comparative advantage over. Nigeria must look in the direction of coconut production, rehabilitation of coconut belt, massive production of improved coconut seedlings, capacity building and empowerment of coconut value chain actors, production of coconut derivatives on demonstration basis, encouragement of proliferation of coconut cottage industries even in clusters for value chain addition and technological advancement in the value chain to encourage private investors.

But then, the debate will still rage on especially with the prevailing hike in PMS.

…Is Oil really a blessing or Curse to the Nigeria Economy?

– Tayo Oyekanmi is a trained Human Resources Manager, former Leader of Ipokia Legislative Council and a farmer.

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