Vanguard (Lagos)

21 July 2014

Nigeria: Derivation Would Serve All

editorial

AN erroneous belief that relevance of oil approximates to the life span of Nigeria's oil reserves partially fuels the laxity with which the authorities treat diversification of the economy. Concerns over dependence of the economy on oil raged more than three decades ago. Now, Nigeria's dependence on oil is total, yet the matter is discussed as one of several issues beleaguering Nigeria.

The vehemence with which delegates to the National Conference opposed an increase in derivation revenue for oil producing areas, should create concerns about their understanding of Nigeria's future. Nigeria is mostly about oil and its depleting consequences on our national resources, some of which are in more abundance and could have more multiplier effects on the economy than oil.

Oil devastates with a rapidity few enterprises impose on their surroundings. The billions of Dollars it pulls into national coffers makes all ignore the perpetual penury oil exploration orders for its environment. Agitations for equitable use of oil resources fail too in securing renewal of the ruined environment.

More frightening, with all the positions on laying more solid foundations for the economy, away from the volatility of oil, not much has been done in the more than 40 years oil assumed podium position in our economy. Delegates' opposition of derivation is a call to further laziness, particularly in re-directing the economy.

Oil could become irrelevant quicker than most predict. Its damages to the environment, its unpredictable prices, increasing pace of searches for alternatives to oil, are enough reasons to create an economy away from oil. Our delegates ignored these.

Plans for the Nigerian economy are primed on oil. They would have been as simple as re-investing oil revenue in other sectors of the economy. They have remained unimplemented.

Oil still accounts for 95 per cent of exports and 75 per cent of consolidated budgetary revenues. Its mismanagement throws the economy into a spin. When the prices dip, or more thieves help themselves to the oil, as seems to be the case now, the economy wheels almost to a halt.

More pressure would have been on our economy with America's decision to patronise alternative energy resources. Without security challenges in the Middle East, the price of oil could have dipped beyond sustainable point for the economy. Our delegates did not see danger signals around oil. They were more interested in fighting for larger shares of a wasting and unsustainable resource.

Derivation is possibly a final chance to return each part of Nigeria to competitiveness, in the understanding that its survival would depend on its efforts.

Without thorough planning of the economy, an indiscernible future awaits Nigerians. Who would rescue Nigerians from the blight of oil?

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