Governor Chukwuma Soludo of Anambra State was widely quoted last week as declaring that Nigeria’s oil revenue had finished and that nothing under that heading had dropped into the federation account for some five months.
The debate is still on, as to whether Soludo was speaking in parables or whether the oil money which most Nigerians thought would run forever is truly finished. Whichever way you want to take the statement, there are certain facts that stand up. One, Soludo, with his background as a former central bank governor, understands the flow of funds from whatever source into the federation account. As a state governor, the Federal Government accounts to him and colleagues about the flow of funds and gives them their shares. He can read and interpret the accounts.
Also clear to interested Nigerians is the fact that there had been forward sale of Nigerian oil over the past few years to finance the deficit budgets. So, while oil drilling might be going on in the Niger Delta still, the output may not actually be accruing to Nigeria, but more to creditor nations and institutions. As such, the aroma of the soup might be all we get, while some others carry the soup pot.
So, either figuratively or definitively, Nigeria’s oil revenue is finished (or just dripping thin). The warning had been sounded over the years that crude oil was a finite resource that would run out someday. But the sound of plenty didn’t allow most of us to hear. Finally, we are at the tail end and most of us are struck incredulous.
So, finally, this resource over which the name, Nigeria clings, is about finished. Let’s tell ourselves the truth, the Nigerian Army rolled its tanks and fired the shots that started the civil war over this resource in 1967. The government had felt that Ojukwu declared Biafra so that the former Eastern Region would own the oil resources alone (though it is speculative how any other region would have acted if its people were massacred like the Igbos were in 1966). Whichever way you interpret this phase of Nigerian history, crude oil was in the background, though hardly mentioned in the open. The people of the Niger Delta have since seen that it wasn’t at for love of its people or some altruistic principle that the war was waged.
After the civil war, crude oil was at the centre of the delineation of states. The oil-bearing lands of the then East Central State were carved into the new Rivers State. Take Ohaji Egbema, which was not just a part of East Central, but even the newer Imo State. It got hived off in the main to Rivers State in the recent past. Its citizens will tell the story of their mixed heritage. Oil drilling still goes on there, with the gas flaring and oil spills. But it might be much more for foreigners than ever before, and might never benefit the owners again as the world turns away from fossil fuel.
So, what will happen to Nigeria as oil money literally finishes?
First, many will live in denial. The theory would be that the ruling class wants to take out our attention from the commodity so that they will suck it in peace. Plausible. Then there will be those that will play rearguard. Yes, the resource is literally drying out, but the scramble will still go on for the last drop of it. If they missed out on the tankers and barges, they will make do with stolen oil barrels which will still turn in profit.
But as my people say, when work stops, overtime must also stop. So, even the rearguard action must come to an end. The sooner we get used to the new life without crude oil, the better. And those old enough would recall that life without crude oil wasn’t hell.
It was without crude oil that the then Eastern Nigeria was adjudged the fastest growing economy in the world, from the early 1960s till the military coup of 1966. Its gross domestic product (GDP) was powered principally by agriculture, trade and services (principally education to which over 40% of the budget was allocated).
The military disrupted the natural flow that had emerged, and reliance on crude oil took over. The rest is history. Democracy became a battle for the capture of votes by any means till the present day.
But can we retrace our steps and turn again towards development? Of course, we can.
In the years of the locust that generally spanned between 1966 and present, a few highlights bear being mentioned. First was the fact that Nigeria financed a war and wasn’t crippled for long. Obafemi Awolowo pulled off a stunt, amortizing the nation’s war debt within three years after the war. That was financial engineering at its best.
The next is that the unitary government that the military introduced concentrated economic development in Lagos. It thus drew people and capital to Lagos from all other parts of the nation. By the 1980s, Lagos accounted for almost half of the power and fuel consumption of the nation. Without any obvious design, by the turn of the century, Lagos had become West Africa’s principal city and nerve-centre. Since the 2020s, the government of Lagos has been referring to the state as Africa’s fifth largest economy, and it jolly well might be.
Occupying a statistical position, though, is one thing, living up to the statistical position is another. With Lagos shinning the light, we see that a couple of Nigerian states are more endowed than some African nations. But for Tinubu’s devaluation of the naira, the budgets of Rivers, Akwa-Ibom and Delta would compare to the national budgets of most West African nations besides Cote D’Ivoire, Senegal, and Ghana.
Now, if the governments of these states and indeed all others see themselves as nodes for economic growth and put their minds to it, they will repeat the healthy competition that the regions had in the 1960s. Competition this time doesn’t have to be strictly based on resource endowment. While climate was a limiting factor in the 1960s, technology has created artificial advantages for the smart and willing. By lowering broadband right of way cost, for instance, a smart governor can make his state an internet hub with all the advantages.
Voters may now want to check out the candidate with the best plan for their people. Ethnic or regional affinity will no longer do.
