An Inescapable Mess

Some other land-owning families saved their own money, built properties, sent children to study abroad and became even richer. Not this particular man and his family. All he wanted to do was enjoy the wealth. He did not invest, he did not project into a future without an easy income. As he collected, he spent. More money, more spending. It was a lot of land, more than any other family in the area.

At a time of his greatest prosperity, when land prices reached a peak, a sudden misfortune struck. Most of his family’s land was flooded by the sea and any kind of reclamation was impossible or too expensive, even for the government to fund. People who had built in the area left their sinking houses for fear of their lives, and new buyers could not be attracted. The man has hit by an unplanned but apparently foreseeable condition.

Fast forward a few years. With our man's income gone, and his little savings depleted, he quickly became broke, haunted by creditors; and he began to lament his fate. He has become shrunken, a broken shell, not recognizable from his days as a socialite who dictated the tunes of popular praise singers. He could not even feed his family, talk less spend money on musicians. While he suffered, he hoped that the flood water that had imposed an economic disaster would recede and his inherited land would be habitable again so he could resume selling. But hardly did he consider that this was a natural event that will not reverse.

This man is the Federal Republic of Nigeria.

Nigeria is a nation blessed with milk, honey and lemon. It is one of the few nations that came off colonialism in Africa without having to suffer the lack that most other impoverished countries endured. No sooner had it become free than oil was struck in commercial quantities at Oloibiri, Niger Delta. Nigeria became a baby with a silver spoon. Although it soon got embroiled in a family scuffle and fought a civil war, it didn't even have to worry so much about the cost of rebuilding after the war. Oil money was waiting to be spent.

By 1973, Nigeria was so awash with petrodollar that the Head of State, General Yakubu Gowon, famously stated that Nigeria's problem was not the money but how to spend it. At one point, he gave every working Nigerian a generous bonus called the Udoji Award. University students got free education, free boarding, free food, free allowance and sometimes spent vacations abroad. Free was a national word. Commodities flowed through the ports so much that it caused a cement armada, where there was no longer any room for the ships to dock. Everybody could afford cars and all kinds of imported goods. Expatriates flocked to Nigeria. Corruption was rife. Soldiers, who ruled with heavy boots, stole as much as they could, together with their civilian accomplices. Mansions sprung up across the land from stolen wealth and Nigerian officials became the darling of Swiss banks.

Farmlands became abandoned, as children of farmers moved to the cities in droves. Agriculture, the source of income before oil, became an indecent profession. Who wanted to waste time on the farm when there was easy money to be made? By their appetite for foreign goods, Nigerians established overseas farms in Thailand and India. Rice became the staple and by the time of the Shehu Shagari administration, something close to the Minister of Rice in the person of Umaru Dikko existed. Coincidentally, it was during that same period that the first serious warning was sounded. Oil price fell sharply in the international market and Nigeria suffered an economic blip. A recovery program tagged Austerity Measures was the first of its kind, a warning that was not heeded. This was a time this writer was in the secondary school and learned from economics teachers that Nigeria could not continue to base the economy on a single stream of income. There was too much reliance on oil but it was a lesson not learned.

God gave Nigeria three decades to put its house in order, but it failed to. By the turn of the century, oil prices began to gain altitude again. The pipelines became exceedingly profitable. The price of oil rose to unimaginable points and as with their military counterparts, the civilian administrations of Obasanjo, Yar'Adua and Jonathan spent profligately. Maybe, Obasanjo spent some of it wisely by paying off national debt to foreign creditors, but a lot was still wasted. Anti-corruption bodies set up by the government to rein in theft soon became weakened by either internal own corruption or diversion of attention to political witch-hunt.

While all of this was going on, an undercurrent threatened Nigeria's bread and butter. Significant changes were taking place that would forever turn the tide on expensive fossil fuel. The United States, not willing to continue its reliance on oil from countries hostile to it, embarked on ambitious projects to boost local oil production. It was now possible to extract oil from America’s interland. Shale oil could now be dug profitably using a technology called hydro-fracking. By 2014, America became as big an oil producer as Saudi Arabia. The country that bought 70% of Nigeria's oil did not need to buy a single barrel by July, 2014. This happened while Nigeria's economic minister, Ngozi Okonji-Iweala, claimed shale oil would not have any impact on Nigeria's ability to sell. She lied. Today, there are over 34 million barrels of Nigeria's oil on the seas that nobody would buy even as cheap as it had become.

In spite of the hydrocarbon glut, nations have concluded that fossil fuel as the engine of development is a risk for the future of the planet. As world leaders converge on Paris for the COP21 climate talks, there is a clear writing on the wall for the fossil fuel industry and the nations that need them, with a growing urgency among business leaders and policymakers to stem usage before the effects of global warming worsen dramatically.

America and other advanced nations have, for this reason, concentrated research on clean sources of energy. Governments threw money into solar energy development, electric car technology and the improvement of mileage per gallon on new cars. Today, Volkswagen has set a record by producing a Passat BlueMotion car that ran 1,527 miles on a full tank of gas. Tesla, an 100% electric car, has become the hottest selling automobile in the world -they can't produce enough. Toyota has just announced its first hydrogen-powered car. Electric and hybrid cars are fast replacing fully gas-run automobiles. All of these mean less oil for the world and more of Nigeria's oil finding no buyer. It is a perfect storm against the economic well-being of oil-producing countries, but a crippling disaster for profligate and wasteful nations like Nigeria.

The reality for today is a volatile oil market which has unleashed a glut of oil, sending the price per barrel of crude plummeting. Goldman Sachs is warning investors that oil could drop as low as $20 per barrel. As prices dropped from a high of $140 in 2013, oil companies are cancelling exploration activities as they retrench employees and OPEC nations are going into socio-economic turmoil. As the world makes a major shift to alternative sources of energy, the clock ticks on petroleum.

One person who has got a reading of this reality is the Governor of the State of Osun - one of the states hit the hardest by the change of fortunes - Mr. Rauf Aregbesola, who admitted that things have fallen apart economically. He has been struggling to pay workers for almost a year, sometimes owing them up to seven months in salaries. The Governor lamented that the state would never again be able to pay its workers from the proceeds from oil. He saw the light, he moved out of darkness, calling on his citizens to go back to the land and farm. The party has ended. Praise singers are out of business. The state received just N55 million as monthly allocation from oil sales, an amount the governor said was not even enough to pay electricity bills at the government secretariat. Nigeria would most likely never again make astounding gains from selling oil. It has to find an alternate source of income. It has to go back to the economic policies that gave rise to cocoa, rubber, tin and groundnut pyramids.

The same oil money that other nations have used to turn their economies around and brighten the fortunes of their people has been wasted by Nigeria. The United Arab Emirates can point to a vastly developed economy that attracts trade all over the world from its wise investments. Dubai has become an economic honeypot. Saudi Arabia is just building the tallest building in the world in a desert. But what can we point to as the gains from oil in Nigeria? A few tall buildings, beautiful houses for a few at Lekki, a national capital that houses corrupt leaders, decaying universities structures, a few expensive cars plying dilapidated roads and a few rich ones. Besides these trappings of wealth, all the money has gone to waste. What a jam we have got ourselves into! We have no one but ourselves to blame – either as bad leaders or as tepid followers.

The rich nation with poor people has to dig itself out of this peculiar mess. It is a mess that was avoidable from which Nigeria cannot now escape. An inescapable mess, that is.