It is time for a serious brainstorming on the long-term strategies needed for Nigeria’s energy and energy sector. But no such thought seems to be in the horizon if the body language and verbal reports emanating from government are anything to go by.
Three recent reports corroborate our assertion about lack of a roadmap from government as well as confirm our clarion call for an urgent and coordinated fresh thinking.
The first report was mid-September when the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, told the world that in 10 years’ time, crude oil would cease to be an income earning resource. It was during a session on “His outlook for the Commodity in 2018”.
He told his audience that though next year would record improvements in crude oil sales in terms of pricing as there would be slight upward movement in price of crude oil but was quick to point out that many high end consumers of the commodity are already perfecting alternative energy.
“In 10 years’ time, I’d be very surprised if any country that hasn’t diversified enough is counting really seriously on oil,” Kachikwu said.
In another vein, even though numerous developed economies are aggressively working their way out of dependence on crude oil, a recent investigation reveals that oil still accounts for a chunky 92 per cent of Nigeria’s total export revenue earnings.
According to the foreign trade statistics emanating from the National Bureau of Statistics (NBS), out of a total export earning of N3.1 trillion for the second quarter, 2017, oil and gas accounted for N2.43 trillion while non-oil sector accounted for the balance of N670 billion. What this betokens is that very little diversification has been achieved in terms of solid minerals export, agro-industrial raw materials and even processed petroleum products.
The third and last point comes from the Society of Petroleum Engineers, (SPE). Mr. Saka Matemilola, chairman of SPE speaking recently, noted that Nigeria spends about $10 million (about N3.6 billion) daily on fuel import. This is alarming.
“…Why are the companies that lift crude oil from this country not establishing refineries in the country? It’s because they find it easier to bring out the crude and go and sell.”
The foregoing episodes only buttress the fact that there is an urgent need for a meeting of minds between the Federal Government and stakeholders in the Nigerian oil sector to chart the way forward. In a stark scenario in which nearly 100 per cent of Nigeria’s foreign earnings depends on crude oil export and the earnings are in turn, ‘repatriated’ back abroad through the massive importation of refined petroleum products; then the country is simply locked in a vicious cycle of underdevelopment.
When we add to this broth, the dire prospect of the developed countries finding viable alternatives to hydrocarbons, then the need for new strategies becomes urgent and inescapable. It is common knowledge that Nigeria has largely mismanaged her vast crude oil deposit which she has mined in the last 60 years.
Through these years, she has neither been able to master the skills needed for extracting this rich deposit of wealth nor has she been able to take advantage of the enormous earnings she has enjoyed from her natural bequeathal.
Nigeria has remained largely under-developed while the cheap earnings from crude export had impeded her ability to diversify and develop other latent sources of revenues. While she has worked herself into being a mono-economy, even the oil industry has remained stunted and unsustainable unlike other oil rich countries namely: Algeria, Libya, Brazil and Mexico which have managed to deploy oil wealth to huge infrastructural impacts.
We urge Minister Kachikwu to go beyond alerting us on the dangers ahead in 10 years’ time; he should tell us the strategies his ministry is putting in place to mitigate the looming disaster.
This is his bounden duty to do.
