03 Feb 2009 |
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Addax’s latest oil discovery is not good news for Imo State By Ayo Akinfe Over the last week, Canadian oil giant Addax Petroleum announced that it had struck new oil deposits in the Njaba Basin in Imo State. Like any other oil company, Addax celebrated the news and began drawing up plans to cash in on its discovery, with obviously no mention of what impact the finding of this Aladdin’s Cave will have on Nigeria. In a sane and rational world, one would assume that such a find would be good news for the Nigerian economy as it would boost export earnings, create jobs, act as a spur for the local environment, create associated employment and serve as a catalyst for regeneration across Imo State. However, our experience in Nigeria tells us that this is unlikely to be the case as history has shown us that such finds have done next to nothing for our people. Apart from the overwhelming evidence from the Niger Delta to prove that oil discovery means nothing to the lives of the people in whose community it is found, we actually know that in many cases, it actually leads to worsening living standards. Apart from this, we also know that oil has led to the decimation of many local industries that thrived before the black oil curse was cast on our people. Across the Niger Delta, we used to have thriving fishing, basket-making, weaving, canoe-building and net-making industries before slicks and gas firing decimated the region. Since 1958, oil has rendered millions of people unemployed across the Niger Delta, with the petroleum industry failing to absorb even one tenth of them. Addax Petroleum currently produces approximately 6,000 barrels per day from the Ossu and Izombe fields in OML124 in Imo State and with this latest find that figure is likely to increase significantly. What nobody has told us is how or even whether the lives of the people of Imo State will be improved as a result of the discovery. Knowing that cynicism has become a national pastime across Nigeria, I would hate to join the ranks of the naysayers, so I am inclined to give Addax the benefit of the doubt in certain regards. They must have seen what is going on to the south of Imo State, we now have a 13% derivation formula in place and the Niger Delta Development Commission is trying to build critical infrastructure across Nigeria’s nine oil-producing states. Having said that, it remains to be seen if Addax and our administrators have learnt from past mistakes. However, for arguments sake, let us give Ufot Ekaette the benefit of the doubt. Oil in itself is not the main problem as far as I am concerned but what makes it a curse is that it has stifled our national development. As of now, 95% of Nigeria’s export earnings come from crude oil sales and there are no plans whatsoever to alter this. So long as the taps keep flowing, we as a people are content to sit back, live off the proceeds and delude ourselves into thinking that crude is an infinite resource. We have made no serious attempt to diversify our economy, get manufacturing going, revive agriculture, develop a modern tourist industry, learn how to provide world-class services or explore the plethora of opportunities solid minerals offer. Now and again we hear half-hearted proclamations from government ministers but on the evidence so far, this is nothing but political posturing. Apart from maybe Lagos State, no other state in the federation is capable of sustaining itself without the handout known as federal allocation. If the finance ministry in Abuja decided that for one month it would not share out revenue, our states would become paralysed. Not only would workers’ salaries not be paid but the actual state structure would freeze. There would be no schools, health centres or even state houses of assembly functioning. Unlike most other oil-producing countries, crude oil has created an unprecedented dependency culture in Nigeria that is actually very frightening. What right has a state got to its existence if it cannot meet its running costs out of its own internally generated revenue? There is something morally repugnant about a state governor shamelessly going to queue in Abuja every month for federal handouts with no long-term plans to ever make his state financially independent. I would go as far as saying that having the ability to run your own affairs without federal aid should be criteria for the existence of a state. Fortunately for us in Nigeria, none of our 36 states are located in barren deserts where nothing grows, there are no resources and economic activity is impossible. Our inability to generate non-oil revenue is down to nothing but a lack of political will on the part of our leaders. Seeing how long this has gone on for, it is hard to reach any other conclusion than the view that we are never going to get off our collect behinds and do anything about it until the oil runs out. They say necessity is the mother or invention, so it may just be that without oil, the bony hand of hunger might force us into getting our collective acts together. Countries with similar climatic conditions as Nigeria such as Brazil, Indonesia, Malaysia, Pakistan, India and Thailand, make nothing less than $20bn a year from agricultural export earnings. There is simply no reason why Nigeria cannot at least match this. With the amount of arable land we have at our disposal, revenue from our farm produce exports should easily surpass what we currently get from oil. If Malaysia can generate $10bn from palm oil export sales alone, nothing is stopping Nigeria with more than 10 times the amount of cultivatable land from raising at least $50bn annually. Given that the Malaysians got their seedlings from Nigeria originally, this alone should shame us into getting our act together. What does it take to produce hybrid seeds, woo commercial farmers, get our smallholders to form co-operatives and introduce semi-processing? Leaving agriculture aside, are countries such as Myanmar, Pakistan, Vietnam, Cambodia and Bangladesh where the likes of Nike and Reebok manufacture most of their goods any more technologically advanced than Nigeria? Is there anything stopping our erstwhile commerce and industry minister Achike Udenwa from wooing such companies to outsource production to Nigeria? Across the banking and telecommunications world, India has stolen a march on everyone by attracting call centres and customer service outfits. I believe Nigerian English sounds more coherent to the average Westerner than that of our Asian cousins and we should have been in there first. Wherever one looks, opportunities are limitless if we care to search. Our problem is simply that with the black gold flowing from the Niger Delta, there is no incentive to develop other areas of our economy. As a result, our export earnings are $60bn when they should be $300bn and our gross domestic product is $200bn when it should be $900bn. As long as 140m people are scrambling for these meagre resources, Nigeria will never be at ease with itself and all the ensuing socio-economic problems that come with poverty will continue to afflict us. Until it is made mandatory for states to source their own income, I do not see things changing for the better in the near future. Maybe having a constitutional provision that allows the president to declare a state of emergency in any state that cannot fund its own annual budget might just do the trick. Whatever short-term problems this will lead to, I believe it is necessary to end this dependency culture that has got us locked into a vicious cycle of take and spend. Ayo Akinfe
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