The present economic uncertainty: We saw it coming
By Jonas Odocha
The classification of nations into developed and developing is predicated on their empirical or measurable levels of industrial development and economic growth and well-being. The essential ingredients that propel and sustain these development indices are the resources which mother-nature has endowed these nations with.
These resources are broadly grouped as Human Resources and Natural Resources. It is also important to know from the onset that mother-nature has not endowed all nations equally with these resources just as it is also obvious that it has not used a ruler to measure out such resources where they occur. It is for this reason, therefore, that some nations are richly endowed in either or both of these resources whereas some others are poorly endowed.
However it is not all nations that are richly endowed that have demonstrated commensurate industrialization and economic growth, whereas some others not so richly endowed have attained tremendous industrial and economic growth. We can therefore infer that industrial development and economic growth of a nation can be driven by planned and proper utilization of whatever resources that nation is endowed with or on the other hand driven by what a less endowed nation of vision can acquire and utilise.
All these efforts at sustainable development therefore can be shown to revolve around a key resource: THE HUMAN CAPITAL CAPACITY.
Mother-nature has endowed our country Nigeria with abundant human and natural resources as indicated by our large population and huge deposits of mineral resources. The latter comprise both energy resources and solid minerals; of which Petroleum, Coal, Solar, Wind, Hydraulic and Nuclear make up some of the energy sources. The solid minerals associated with the igneous and metamorphic rocks widely distributed in Nigeria include Tin, Gold, Lead, Zinc, Bauxite, Limestone, Iron and many more. It is important to note that not many countries are this blessed with resources and the question that begs for answers remains: IS OUR LEVEL OF INDUSTRIAL DEVELOPMENT AND ECONOMIC GROWTH AND WELL-BEING COMMENSURATE WITH THIS ABUNDANCE OF RESOURCES?
Energy is the veritable ingredient or major resource that propels industrial development, which invariably translates to economic growth. Since the Industrial Revolution of the 18th century, Petroleum Oil and Gas resources have remained the predominant energy sources in powering machinery for mechanized labour, having displaced Coal which was hitherto the primary ingredient. The preference of Petroleum over Coal derives from its higher efficiency and the reduction of obvious environmental and health concerns associated with Coal which is regarded as being technically dirty.
In Nigeria, prior to the discovery of petroleum, Agriculture and Solid minerals were the essential contributors to economic growth. One must also appreciate the fact that our country was under colonial rule at this period which meant that the economic interests of the colonial masters had to be met before paying attention to the interest of the citizenry of the colony. Please permit me to illustrate with this mundane but significant scenario. The colonial masters exported finished products to Nigeria, including alcoholic drinks, particularly the popular Scottish Dry Gin label. The natives on the other hand also produced their own alcoholic drinks by the fermentation and crude distillation of their local palm wine. To frustrate the local production and competition with the imported variety, the authorities labelled the local brew as ILLICIT GIN, not only banning its production but also apprehending and jailing both producers and consumers.
Another interesting scenario for THE OPEN COURT pertains to the experience of Nigeria after discovering oil and gas immediately before gaining independence from Britain. With increased production levels and the desire of multi nationals to invest in petroleum exploration and exploitation in Nigeria, the British government expressed interest in the development of Nigerian gas resources. Discussions were intensified by 1962 and the opportunities for both domestic utilization and export of the liquefied gas were very attractive. Suddenly all these discussions and efforts went dead. Why? Gas was discovered in the North Sea and our erstwhile colonial masters and friends turned their backs on the Nigerian project to develop their own new found gas resource. The message: THE POWER OF ECONOMIC INTEREST! No other nation will bend itself over to put forward your own economic interest before its own!!!
This then brings us to the Nigerian situation whereby the level of our industrial development and economic growth is definitely not in tandem with our abundance of both human and natural resources. Where did we go wrong?
Japan rose from the ashes of the World Wars and in spite of paucity of natural resources, this country is today a leading industrialized nation. The Asian tigers have risen significantly on the industrialization ladder with minimal endowment of natural resources. Interestingly enough with each advancement in industrialization is the concomitant growth in the economy of the country and the well-being of the citizenry. What else is Visionary Leadership? What else Governance, but PEOPLE AND DEVELOPMENT.
In Nigeria some factors have been accountable for our imbalance in industrial development and economic growth: DEPENDENCE ON MONO ECONOMY. UNDER UTILIZATION OF REFINING CAPACITY LEADING TO IMPORTATION OF PRODUCTS. NEGLECT OF THE SOLID MINERALS SECTOR. FOOD INSECURITY FROM ABANDONMENT OF AGRICULTURE. DEARTH OF TRANSPARENCY AND ACCOUNTABILITY.
The OIL BOOM heralded the access to quick money which led to NON DIVERSIFICATION OF THE ECONOMY. But with the discovery of oil in frontier basins and the deep offshore by many other countries of the world, theeconomic relevance of petroleum began to wane. DID WE SEE THIS COMING? YES THE TECHNOCRATS AND THE ECONOMISTS DID WARN BUT OUR LEADERS, BOTH THE MILITARY AND THE POLITICIANS APPARENTLY FAILED TO HEED THE WRITING ON THE WALL!
In the recent past America, our leading Oil and Gas importer has ceased to buy, with their discovery and production from their large deposits of SHALE OIL by FRACKING technology. The United Kingdom has also towed same line. PROTECTION OF ECONOMIC INTEREST!
WE SAW THIS COMING! We must now go back to the drawing board and RESUSCITATE THE SOLID MINERALS SECTOR, BUILD MORE REFINERIES, DEVELOP THE AGRICULTURE SECTOR TO ENSURE FOOD SECURITY. All other areas of development, Education, Health, Infrastructure, Security can then leverage from there.