Unarguably, the African continent is home to five of the top 30 oil producing countries in the world. Nigeria, with a maximum crude oil production capacity of 2.5 million barrels per day, ranks as Africa’s largest producer of oil and the sixth in the world.
Regrettably, the country’s oil sector is fast losing its relevance given the vagaries in the market. What this means is that the country might be taking calculated risk if the report from the Organisation of Petroleum Exporting Countries (OPEC) is anything to go by. The oil cartel is forecasting a lower demand for crude oil next year just as it said that crude oil exporters face gloomy months ahead.
Experts indulge in intelligent guess of what Nigeria would have become without petrol dollar. She probably would have been poorer and maybe a less functional country, or could have been more creative and managing whatever little resources she might have earned from other resources. All these are at the level of conjecture.
It is usually difficult for economic operators to base a budget on earnings from a product /commodity whose price could be high today and very low tomorrow. Invariably, what this entails is that falling oil prices will affect adversely both monetary and fiscal policies of any government that solely depends on the commodity. To avoid such a development, it is imperative for the country to look beyond oil for enduring and holistic development strategies, notwithstanding the benefits derived from the commodity.
Though the petroleum sector is important, it remains a small part of the potentials of the country’s overall economy if meaningfully diversified. It is against this backdrop that the country must embark on a sensible search for a path to a more sustainable development. To achieve this, agriculture and solid minerals can be opened up. While we can boast of a huge deposit of crude oil, there are even bigger deposits of different types of solid minerals across the country.
Most states, however, are blessed and are sitting on vast quantities of minerals like Tin, Kaolin, Tantalite, Barite, Iron-ore and Uranium. Other minerals in this category are Zinc, Gold, Silver, Lead and precious stones. The solid mineral sector, if developed, could help to combat poverty in Nigeria via job creation, given its linkage with other sectors of the economy. But more significantly, it could help alleviate some of the problems associated with “enclave” nature of the Nigerian economy that has for too long being vulnerable to fluctuations in global oil market. However, the government must create an enabling environment for the private sector to take the lead in the sector as well as strengthening existing non-oil development policies.
Thus, as a matter of priority, it is the opinion of this newspaper that the government must encourage the ongoing diversification efforts of the economy. This is the most viable way to survive the current environment of global economic uncertainty. Since it is a known fact that for a country to attain growth and development, its economy has to be diversified. So, the era of mono-economy needs to give way to the more productive development forvarious sectors of the economy. The obvious outcome of diversification is that Nigeria will not depend on oil for 95 per cent of its Gross Domestic Product (GDP). It will also mean that with a robust and diversified economy, Nigeria will join the ranks of more economically diverse and industrialised nations of the world and it is on track to become one of the 20 largest economies by 2020.
Although crude oil has served Nigeria pretty well over the years, it might not do so much longer than we are expecting as the prices are daily tumbling so low that the country would be unable to meet growing needs, thereby throwing the economy into crisis. This is why it is pertinent to end this sole dependence on oil and look to other promising and sustainable sectors. We therefore urge the government to pay more attention to the solid mineral, agricultural and other sectors, as the earnings from these sectors could eventually be far bigger than what we are currently making from oil.