Anecdotal Accounts That Underline Nigeria’s Illusion Of Abundant Resources (first published, March 2015)

The Oasis Reporters

March 22, 2020

By Engr. Ian G. Udoh

As for the illusion that Nigeria has abundant resources (even limitless resources), and should be able to afford all the infrastructural marvels of the First World overnight, if it were not for corruption, it is just that – a big fat illusion! It has been lent false credence over the years by otherwise intelligent commentators, both foreign and domestic.

The following anecdotal accounts underline our relative lack of resources:

The combined budget of our Federal, States & Local Governments (to which Oil and Gas revenues contribute 70%), at around $66 billion (pre oil price crash) for about 170 million people, is smaller than the budget of New York City for 2015, which is $75 billion – for a city of just over 8 million people!

In 2004, almost 336,000 patients were undergoing maintenance dialysis in the United States at an annual cost of $32 billion to Medicare (a Government-run programme). With the patient population projected to exceed 700,000 patients by 2015, the costs to Medicare could exceed the combined Federation budgets of Nigeria (about $66 billion). This is for kidney dialysis alone! Never mind the whole Health Budget!!!

Back in the 1980s, when Michael Dell (the owner of Dell Computers) was generating revenues of $12 billion annually using only 12,000 employees, while Nigeria’s oil revenues were the same $12,000 billion annually for over 80 million people at the time. Yet we were all gathered around these meagre oil revenues, fighting, quarrelling, complaining (of marginalisation), plotting coups, plotting counter coups, foiling phantom coups, and today whining about interim governments. A poverty mindset greater than this is nigh impossible to imagine!

Apple Inc, maker of iPhones, iPads, iWatches, MacBooks, etc, has cash reserves of over $500 billion – dwarfing our much touted foreign reserves. Even Harvard University has a wealth fund of over $40 billion, comparable to our foreign reserves even at its peak.

So we would all do ourselves a massive favour to disabuse ourselves of this illusion that we have “abundant” (or even limitless) resources. That is just what the Western world says to us when they want to flatter us and coax some of our money away from us. If any of us is put at the head of government today, where would we get the funding to perform all these miracles we seem convinced that’s so easy to implement, considering that we need an additional $300 billion to bring our power consumption to the South African benchmark of 4,600KWh per capita? We are currently at 200KWh, up from 80KWh in 1999.

What did the Critic-in-Chief, Matthew Obasanjo do for our infrastructure in his 8 years in the saddle? One Stadium along with the Games Village, and that about wraps it up.

For these reasons, we all talk about Foreign Direct Investment, and the privatised environment that enables such flows, as the only route towards getting the massive infusions of investment required for infrastructural makeover this country requires. Otherwise there is absolutely nowhere else we can raise the over $300 billion required for the power sector alone.

From the foregoing, it becomes obvious that the Indigenisation Decree of 1971 was a disaster! As a first consequence, it shut down nearly all flow of foreign investments, modest as they were at the time. Agriculture took the first hit from this misadventure, levelling the groundnut pyramids, and Nigeria lost its pride of place as the world’s largest producer of cocoa. Ditto for Palm oil, Rubber and Cotton. The investments for these simply dried up. Of course, Coal, Tin and Columbite (largest production in the world) also suffered collateral damage and collapsed completely.

It is merely coincidental that the rise of oil to prominence in the Nigerian economy (the oil boom) happened at around this time (the 1970s), leading most people to conclude that it was Oil and Gas that killed off Nigeria’s Agriculture and Solid Minerals Industries, turning Nigeria into a monoculture economy – more befitting of a banana republic. The real killer was that Indigenisation Decree. The communist style nationalisation of the “commanding heights” of the economy by the Military Governments of the day delivered the “coup de grace”. We thought we could do everything with oil revenue alone (“funding is no longer an impediment to development”, as was averred at the time). The rest, they say, is history.

The way forward

We must create an ever improving business-friendly environment to attract more foreign and domestic investments. We must expand our tax base, which at present only contributes an appallingly paltry 8.3% to Government revenues. We must grow the economy rapidly by setting up a virtuous circle of Investments >> Tax >> Greater Investments >> More Tax Revenues >> Still Greater Investments. Guess who is already blazing this trail of prosperity? President Goodluck Ebele Jonathan.

As for President Jonathan: when objectively and rigorously rated with the facts on the ground (the fast growth of infrastructure, agriculture and the economy) against past leaders, some discerning observers have to come to the sad conclusion that reasons other than performance drive this vilification he is getting from some commentators.

Engr. Ian G.Udoh is a Petroleum Engineer and an avid debater on Economic matters.

Greg Abolo

Blogger at The Oasis Reporters.

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