Nigeria @ 56: Still The Same Old Song

NIGERIA is 56 years old and in line with the tradition, Nigerians have been taking stock of the developmental strides the country has recorded within these years. For now, the economy of the nation is built around the oil resource via the petroleum industry. Considering the importance of oil to the growth of Nigeria’s economy, how far has Nigeria fared in this direction all these years?
Before oil business came on stream in Nigeria, the agricultural sector served as cornerstone of the nation’s revenue. Agriculture provided fertile ground for the growth of Nigeria in every ramification of life.
Recall that in the 60’s, the South West part of Nigeria, blessed with cocoa agricultural product, derived immense gain from its cocoa production just as it contributed part of the proceeds to the Federal Government.
While cocoa was predominantly cultivated in the West, the North, precisely, the ancient city of Kano witnessed the production of groundnut which gave rise to the famous groundnut pyramid in Kano and ultimately contributed to the economic growth of the area nay the country.
Suffices it to say that all the regions in the country were blessed with one agricultural produce or the other. For instance, Enugu in the East was known for its coal natural endowment as rubber, palm- kernel and timber businesses thrived in virtually every part of the country, especially in the South. Proceeds from all these agricultural blessings provided earnings that triggered the growth of Nigeria. Then, the going was good for Nigeria, economically, politically, socially and otherwise before the country discovered the oil resource which became additional blessing from God.
The discovery of oil paved the way for a new economic direction for the country. The nation’s craze for wealth from oil consigned the agricultural sector to oblivion. Oil became the centre of attraction. How did it start?
According to an account of oil business in Nigeria as provided by the Nigerian National Petroleum Corporation (NNPC) under the title ‘History of the Nigerian Petroleum Industry’, oil was discovered in Nigeria in 1956 at Oloibiri in the Niger Delta after half a century of exploration.
The discovery according to the write up was made by Shell BP, at the time the sole concessionaire. From here, Nigeria joined the ranks of oil producers in 1958 with its first oil field churning out 5,100 barrels per day (bpd).
Goaded by this feat, Nigeria moved a step further in 1960, to secure exploration rights in onshore and offshore areas adjoining the Niger Delta and extended same to other foreign companies. In 1965, the EA field was discovered by Shell in shallow water Southeast of Warri.
Also, the NNPC information bulletin revealed that with the end of the Nigerian civil war in 1970 which coincided with the rise in world oil price, Nigeria was thrown into opulence from its oil production.
The country thereafter, joined the Organisation of Petroleum Exporting Countries (OPEC) in 1971, a development that led to the establishment of the Nigerian National Petroleum Corporation in 1977, The NNPC, a state owned and controlled corporation became a major player in both the upstream and downstream oil sectors.
History of petroleum industry in Nigeria had it that by the late sixties and early seventies, Nigeria ‘had attained a production level of over 2 million barrels of crude oil a day. Production figures were said to have dropped in the eighties because of economic slump but it picked up in 2004 rising to a record level of 2.5 million barrels per day (bpd).
As said earlier, the emergence of petroleum production and its export relegated the agricultural sector to the background. It became the mainstay of Nigeria’s economy, accounting for about 90 per cent of the nation’s gross earnings.
Armed with oil resource and its unparallel gains, Nigeria became stupendously a rich country. There was enough oil wealth at the country’s disposal for our leaders to plough into strategic sectors of the economy to enhance even development of every part of the country, build building blocks for its future all- round growth and possibly save for the rainy day but our leaders did not plan for the future.
The cost of Nigeria’s opulence was heightened when some refineries were established in the country. First, the plan to construct both Kaduna and Warri Nigerian National Petroleum Corporation (NNPC), refineries according to reports was mooted in 1994 while the Federal government gave order for the establishment of a third refinery in 1975.
A refinery with crude oil capacity of 42,000 barrels per day (BPSD) was anticipated. It was therefore, designed for a capacity of 60,000 BPSD which was quickly followed by FG’s order that no refinery should operate below 100,000 BPSD.
However, contrary to the initial design and intention of the Federal government to operate a skimming type of refinery, the project was transformed into an integrated refinery.
At this point, the refinery was restructured to produce various types of petroleum products which were in the form of fuels for use as Liquefied Petroleum Gas (LPG), the Premium Motor Spirit (PMS), Auto motive Gas Oil (AGO), or diesel oil, kerosene, fuel oil amongst others.
Kaduna lubricating oil refinery said to be the first of its kind in West Africa and one of the largest in Africa was the brain child of a consulting firm, KING WILKINSON of Hague, Holland along with NNPC engineers. On completion, the project was commissioned in 1980 while the lubricating plant was commissioned in 1983 and petrochemical plant in 1988.
Since its inception, the NNPC has been partnering with major oil companies in Nigeria in the Onshore Niger Delta, coastal offshore areas and in the deep waters. The multinational oil companies Nigeria operate in partnership with the NNPC under Joint Operating Agreements (JOAS) or Production Sharing Contracts (PSCS), while the indigenous oil companies partner International oil companies under sole risk or independents.
So far, Nigeria’s oil wealth, how has it contributed to the growth of Nigeria since its discovery?
Indeed, oil business in Nigeria was supposed to have bestowed on Nigeria tremendous blessings, but this was not to be as it became a weapon for the underdevelopment and pauperisation of not only the country but also the region where the resource is tapped.
Although, it is on record that the oil money accounted for the making of many modern cities, in Nigeria, like Abuja, the federal capital territory, it has engendered miserable existence for the oil producing areas who have little or nothing to show for the oil from their region.
Once upon a time, particularly during the era of General Yakubu Gowon as Military Head of State, Nigeria witnessed an oil boom. Whereas, it would have been ideal and development driven for government to have channelled the much money in its coffer into full scale industrialisation of the country as well as prepare plans on how to address the problems inherent in the exploration of oil in the Niger Delta, the reverse was the case.
According to a write-up on FG, AUTHORS site, tagged ‘Nigeria’s Crude Oil: A blessing or curse?’ the oil boom brought about a great turn-around for Nigeria and further brought it to international limelight as a major oil producing country in Africa, but it also brought about a complete and senseless desecration of the environment especially in the oil sector, loss of indigenous occupation among local communities, corrupt practices and rural to urban migration in search of perceived oil-related white collar jobs amongst others.
Over the years, the activities of oil companies have been taking their tolls on not only the lives of people of the oil producing areas of the country but also on the ecosystem.
For instance, oil exploration in Ogoniland just like any other part of the Niger Delta has lest devastating effect on the people of the area. This triggered late Ken-Sarowiwa’s agitation for the federal government to accord the people of the area a fair place in the Nigerian project. But he died while fighting for a just course for his people.
After the death of Saro-Wiwa, the group, he founded, the platform, for his expression against government’s injustice to the region continued with the struggle but the federal government remained insensitive to their plight.
At a point, some militant groups, such as the Movement for the Emancipation of Niger Delta (MEND) sprang-up, applying some measure of force with a view to compelling government to attend to the plight of the people. Their activities prompted late former president Musa Yar’Adua to enter into truce with them on the wings of his administration’s amnesty project.
Be that as it may, the oil industry within the 56 years of Nigeria’s independence, has not been living up to expectation. For Niger Delta people, their case is likened to the ripest fruit being the saddest. Instead of oil to provide job for the people, joblessness has continued to be their lot just as nothing good comes out from their land and rivers because of the effects of oil pollution borne out of government’s inability to make the oil companies keep to the rules of exploration.
For some concerned Nigerians ‘Issues of environmental degradation as a result of the exploration of oil in Nigeria have continued to leave sour spots across many oil communities because of the negative impact the activity has on human existence, bordering on threats of extinction or wiping out of a whole community and their livelihood’.
Mr. Sulaiman Arigbabu, the Head of Environment and Sustainable development of the Human and Environmental Development Agenda (HEDA), in one of his comments on oil and its impact on Nigeria’s economy, says, ‘I see the discovery of oil in a negative way because its impact on the environment has been enormous and it has a long term effect. Nigeria has suffered from oil due to corruption in the use of what you gain from oil, it has destroyed our fisheries and agriculture and it has brought about societal conflict and even at the national level such as the issue of armed militants.
‘In my opinion, discovery of oil has dissuaded us from hardwork and thorough national planning to enable us reform our economy and get back on track in developing our nation just like other nations that started the journey of national development at the same time with us but are now far ahead of us’.
Of a truth, oil, all these years has done more harm than good to Nigerians. As a quick money spinning resource, with little or no sweat to have it, some powerful Nigerians as well as some die hard persons in the society who have access to oil, have in no small measure amassed wealth to the detriment of the people and growth of the country. Most of their ill- gotten wealth from oil is spirited to the western world to swell their economy, leaving the economy of Nigeria in a battered shape and incapable of catering for the wants of Nigerians.
Apart from this, all the tiers of government placed their hope of survival on the oil. They refused to look inwards for other meaningful ways of sourcing revenue to meet their obligations to the citizens.
Our leaders, including many Nigerians who see the petroleum sector as the cheapest means of making money, have over the years, so relied on the gains from oil to the extent that their inordinate ambition has become a burden to the society. The people no longer have recourse to farming for survival, they import everything, even those that can be easily manufactured here, thereby exposing our economy to danger.
This was the situation Nigeria found itself until the oil price came tumbling in the International oil market. The federal government focused all its attention on the oil. At a time, like the oil boom era of the 70’s, the country was raking in much benefit from the oil and gas sector.
During this period, the price of a barrel of oil was above $100. The daily production was on a high level, making other tiers of government, especially, the states to enjoy huge allocations from the Federation accounts.
Besides, there was the Excess Crude Oil Account, where the gains from the petroleum sector are saved and subsequently shared to enable all the segments of government deliver so called dividends of democracy to the people.
While the country was swimming in its oil wealth, which kept rising, its joy knew no bounds. Joy they say is very fragile, if it is not well handled, it can be easily broken.
No wonder, we are where we are today. The overpriced oil, the pride of the country, no sooner, the price somersaulted than Nigeria’s economy went down the drain.
Lamenting that Nigeria’s agriculture has fizzled out to the level that the nation is now a net importer of food when it was once known for its export of agriculture produce at the International market, Mr. Arigbabu said ‘We have lost our crude oil gains due to corrupt public officials and we now import food that we once exported. He advised government to be prepared to move ahead by looking into renewable sources of energy that would ensure a cleaner environment and assist us more in line with global trend since the world is now focusing on renewable energy.
There is wisdom according to him for government to make good planning for renewable energy since the oil will finish one day.
Hear him ‘Our crude oil will definitely finish one day since it is not a renewable source of energy. Nigeria has only a window of between 10- 20 years to make good planning for renewable energy sources in the future by encouraging research which will in turn promote our industries and manufacturing sectors. Our future and that of the world now rest on proper knowledge and planning’.
It is the belief of many that not until the Petroleum Industry Bill (PIB), now before the National Assembly is passed into law, the oil and gas industry would not make positive impact on the lives of Nigerians as well as bring about the growth of the country.
The bill which is still begging for the lawmakers’ attention seems to contain solutions to the intractable problems facing the oil sector. There is therefore, the need for lawmakers to speed up the debate on the bill for Nigerians to enjoy its expected benefits.
It is worrisome that at 56, Nigeria is still tied to importation of fuel while the existing refineries have not been able to perform fully to the satisfaction of Nigerians. So, it is high time the oil sector was repositioned to perform efficiently for the betterment of Nigeria and the revival of the ailing economy.