FALL IN GLOBAL OIL PRICES AND NIGERIA'S ECONOMY: WHEN A PROBLEM BECOMES THE SOLUTION
By Dr Abubakar Alkali
Email: [email protected]
The current downturn in the price of oil has led to an economic turmoil that has reverberated across the globe with negative consequences for the living conditions of the people. It is also noteworthy that the global economic downturn coupled with senseless attacks on oil infrastructure in the Niger Delta and decades of relentless corruption have conspired to bring Nigeria to recession.
Figures released by the Nigeria bureau of statistics (NBS) showed that the country's GDP fell by 2.06% in the second quarter of 2016. This is a follow up to a 0.4% in the first quarter of 2016. The 2 consecutive declines in the first and second quarters of 2016 mean that Nigeria's economy is now officially in recession. The current economic travails facing our dear country are the aftermath and aggregate result of unscrupulous corruption and official fraud perpetrated over several decades particularly under the Jonathan administration. Indeed but for divine intervention which brought President Muhammadu Buhari into power on a mission to rescue Nigeria, our country could well have been history at this time.
Nigeria's economic challenges have less to do with the economic problems into which our country finds itself today but more to do with how we handle it. Global economic recession is a problem in itself by all definitions but it can be turned into the solution to Nigeria's economic challenges.
The solution encapsulated in the current economic recession is the opportunity it provides for our great country to tarry awhile, retool and restrategise a new path to economic development.
The path to economic recovery lies in fashioning out a strategic and comprehensive economic plan that will exploit the abundant natural resources spread all across Nigeria. However, in fashioning out this economic marshal plan, Nigeria has to PRIORITISE on one commodity (with another as a compliment).
Production is sine qua non to resuscitation of our ailing national currency, the Naira and by extension, sustainable economic development. The path to Nigeria's economic recovery lies in production to empower the real sector of the economy and kick start a new boom in manufacturing and exports. This will strengthen the national currency – the Naira- against other currencies, create jobs and spread economic opportunities to all.
The key to Nigeria's economic recovery lies in AGRICULTURAL REVOLUTION with special focus and master plan on mechanised RICE production on the first line call and COTTON production as a compliment.
In this regard, it will be worthwhile to invest the loot recovered so far in President Buhari's genuine anti-corruption drive into mechanised RICE and COTTON production. Building infrastructure is an excellent initiative but the multiplier effect of mechanised rice production is clearly more apparent.
It should be noted that the current peasant rice farming will NOT drive the RICE REVOLUTION and translate to a solid foundation towards Nigeria's economic recovery. What will is a comprehensive MECHANISED system of farming using modern equipment. To this end, there is the need for the federal government to enter into a joint venture and acquire the farms in form of a lease hold with the farmers towards maximum utilisation of the farmlands through a comprehensive mechanised rice farming programme.
The lease hold of the farms should be entirely consensual and is necessary especially when juxtaposed with the fact that the peasant farmers lack modern equipment and the technology to exploit these farms to maximum capacity utilisation. The lease hold agreement between the federal government and the farmers could include incentives such as offer of 10% of rice produced in their farms including but not limited to payment of rent to the farms by the government.
Under the proposed RICE REVOLUTION, Nigeria can set a target to export rice in 3 years after satisfying domestic consumption and demand. It is time to put a stop to importation and consumption of Thailand rice.
For a successful implementation of the rice revolution programme in Nigeria, there is the need for the government to focus on the dams with potentials for irrigation and all year round rice production. These dams include but not limited to, the Goronyo dam in Sokoto state, the Bakolori dam in Zamfara state, the River Niger Valley in Kebbi state a.k.a the rice farmers haven and the Hadejia-Nguru wetland in Jigawa state. These 4 dams put together, have the potential to feed the whole of Africa with rice and even exports beyond Africa.
It is imperative to create a RICE REVOLUTION COMMISSION under the Presidency for the administration, monitoring and evaluation of the programme. Instead of running a highly bloated and bogus government, the size of government should be drastically reduced and wastages plugged and invested into the Rice revolution to kick start the journey towards economic development and prosperity for all Nigerians.
For a successful mechanised RICE REVOLUTION, there is the need for the government to equip two agricultural research institutes to drive this policy. These are the national agricultural extension research liaison services (NAERLS) at the Ahmadu Bello University (ABU) Zaria and the international institute for tropical agriculture (IITA) Ibadan. These research institutes will serve as centres of excellence and drivers for the needed technological framework for a successful implementation of the rice revolution.
So much money is wasted through corruption and official gangsterism such as the budget padding scandal involving senators and members of the House of Representatives. How great it will be to plug these wastages and invest in the real sector of the economy to create jobs for Nigerian youths?
It beggars belief that Nigeria with all its potentials for rice production cannot satisfy its local demand for rice and is happy to import rice from Thailand while watching its dams lie fallow. For over 50 years now, Nigeria has been importing rice from THAILAND. What a shame!
The rice revolution has the potential of a multiplier effect as an export commodity to earn foreign exchange and drastically bring down the exchange rate of the Naira against foreign currencies. It can also ensure in food security in Nigeria as rice is a staple food in nearly all homes in our dear country. It will also promote the creation and sustenance of small and medium scale enterprises (SMEs) and other small businesses to create millions of jobs for our teeming unemployed youths.
Small and medium enterprises (SMEs) and other small businesses are the engine room of any economy as a result of their potential to create jobs and spread opportunities amongst our youths. The middle class is currently almost non-existent in Nigeria. It is either you are extremely rich OR overwhelmed by uncommon poverty. There is NOTHING in between. The SMEs will promote the resuscitation of the middle class in Nigeria.
To mitigate risk and serve as a compliment to the rice revolution programme, the federal government should also create a COTTON REVOLUTION programme. Mechanised cotton production will effectively place Nigeria among the leading industrialised nations through the resuscitation of our ailing textile factories and creation of new ones. The COTTON REVOLUTION just like rice, has the potential to create millions of jobs through the promotion of SMEs and small businesses.
There were cotton storage facilities in Nigeria several decades ago such as the one in Mayanchi Zamfara state which although still standing, looks every inch a dilapidated and forgotten structure courtesy of the oil boom in the 70s. There were also the groundnut pyramids in the North, the palm kernel oil extraction in Eastern Nigeria, the cocoa production in the west. All these treasures were abandoned in a hurry when Nigeria discovered oil. Now that oil is no longer fashionable and long gone as a reliable resource, Nigeria has to go back to these traditional agricultural treasures.
With all the fruits and veg that abound within the Jos – Nassarawa – Abuja axis, Nigeria cannot raise a standard fruit processing factory. We are happy to import five alive which we can produce and export. With all the tomatoes that is produced in Northern Nigeria, our country still imports tomato paste. That's not the way to strengthen the Naira or build an economy
Nigeria has no option today than to redirect its economy away from oil and strategically towards agriculture. Even the global economic super powers are moving away from oil and shifting towards agriculture. The global trend now is towards renewable and nonconventional sources of energy such as solar energy, hydrogen energy, wind energy, biomass, ocean energy and nuclear energy. These green energy sources are environmentally friendly and inexhaustible.
No country serious about economic development will trust oil any longer. For once, oil is a finite commodity and will certainly dry up at some point. Oil is energy of the past. Already oil wells are drying up. Moreover, oil is an environmental pollutant through carbon emission which causes global warming and climate change. The almighty dependence on oil has led to two critical problems facing the world today: Energy insecurity and environmental pollution.
Any country that opts to be cavalier and stay out of the rat race towards the exit door away from oil and towards renewable energy will in a few decades find itself lagging behind. Countries are now investing heavily in research into nonoil sources of energy.
Nigeria has all that she needs to take its rightful place in the comity of nations. Our country is hugely endowed with both human and natural resources most of which lie fallow and generally unexploited. The only missing link is the proper MANAGEMENT of these resources. Based on the enormous resources that abound in Nigeria, it is fair to say that no Nigerian has any business with poverty. But here we are today with a poverty index of 86% and rising. This means out of every 10 Nigerians, 2 are poor and cannot afford 3 square meals per day.
Another cog in the wheel of progress of Nigeria is the clear division amongst its people. It is fair to say that Nigeria is a hugely divided country and this unnecessary division has not fared well for any of the tribes and ethnic groups. It has only served to retard our progress. The igbo looks at him/herself first as Igbo and reluctantly as a Nigerian, same to the Hausa man, the Yorubaman and other ethnic groups. That is NOT the way to build a prosperous nation.
We are all guilty of the unnecessary and pervasive division that has only served to destroy our country. For us to move forward as nation, we must think as NIGERIANS FIRST not as members of a particular ethnic group.
For God's sake, there is too much politics in this country to the detriment of the economy. Almost everything is tied to political office. To achieve genuine economic development, create jobs and spread economic prosperity amongst its citizens, our dear country must play down on politics and prioritise economic development.
Where is the wisdom in maintaining 109 senators and 360 members of the House of Representatives with no defined contribution to national development and spending over N1.5 trillion annually on their jumbo allowances while leaving their constituents in abject poverty? The 439 members of the national assembly have no clear role in nation building but consume 25% of the national budget.
How fair is that to the average Nigerian currently living in abject poverty and fighting the battle of his life under excruciating poverty and economic recession to feed his family even on 0-0-1, pay his children's school fees and face his landlord at the end of the month?
Nigeria is today the only unrecognised global super power. Our country has all the potentials to be a world super power but alas, we are still ranked a third world nation. The super power status doesn't just come as a gift. Nigeria has to earn it. We have to take our chances to be recognised as a global super power. Our chances lie in the enormous natural and human resources in our country, arable land, agriculture, solid minerals, etc.
Let's start with mechanised RICE production and build on it.
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