5 Reasons Nigeria Can Prosper Without Oil: Advice For The Next President
Nigeria is one of the largest oil producers in the world, but it has been struggling to keep up with other countries that do not rely on oil revenue. Nigeria's next president will have a unique opportunity to help Nigeria prosper without relying on oil money. Here are five ways they can do so:
Section 1: Nigeria is an oil-dependent country
Nigeria's economy is dependent on oil sales. Nigeria produces 1.7 million barrels of oil per day. This number is currently dropping by a quarter because Nigeria has been unable to meet domestic demand for oil. Nigeria is the sixth largest oil producer in the world and the largest producer of black gold in Africa, accounting for nearly one-third of the continent's output.
Section 2: Oil revenues account for a large portion of Nigeria's government revenue
Oil revenues account for about 40% of Nigeria's government revenue. According to the World Bank, the majority of the revenue from Nigeria's oil sector flows to three tiers of government: Federal, State and Local governments.
The best opportunity for Nigeria to prosper without oil
Nigeria has tremendous resources available for its development, but it needs a leader to take advantage of these opportunities.
Sharing these five strategies is the first step to making Nigeria the economic powerhouse it could be.
Oil could come back in Nigeria, but it needs to happen at the right time and it will take time. I believe Nigeria is about to create a perfect storm.
Critics have pointed out that Nigeria should be doing more to diversify and make money off of other industries such as agriculture or technology.
The author then goes on to list five strategies for making Nigeria's future future a bright one, without relying on oil.
Why focus on these five strategies?
Well, one answer is because oil production is in a precipitous decline. On the flip side, Nigeria's population is exploding, and there is talk of a significant population explosion in Nigeria. The population will be 2.5X the size it is now within the next 12 years, and 10X within 30 years. With such high growth rate, Nigeria is poised to become a significant trading and oil producing economy, even without fossil fuel based wealth.
The number of wealthy individuals in Nigeria has risen dramatically since 2006, however, the oil income from Nigeria has stagnated, suggesting that the wealthy individuals are diversifying their assets. Perhaps the wealthiest Nigerians are purchasing assets outside of oil, or investing in luxury goods, where income will be most likely to continue to be stable.
Increase investment in agriculture
Demand for basic agricultural products (corn, rice, potatoes) are increasing around the world. According to a report by the Food and Agriculture Organization (FAO), agricultural production in the developing world will need to rise by 70% between now and 2050, in order to meet future food demand. In Nigeria, agricultural production is falling. Nigeria's efforts to industrialize have led to declines in farming activities. According to the National Bureau of Statistics, Nigeria's total agriculture production dropped from N39.97 trillion in 2014 to N39.61 trillion in 2016. That is a 10.57% drop in just four years.
The decline in agricultural production can be attributed to a number of factors, including a fall in the country's oil production, which directly impacts food production.
Improve infrastructure and transportation
These are two key areas the next president must prioritize as he or she strives to move the country forward. Some major infrastructure projects in Nigeria have been completed, and the country is planning many more, but Nigeria's lack of high-quality roads and congested highways makes traveling even short distances to the city an exhausting experience. By improving both infrastructure and transportation, Nigeria will be able to expand its economic opportunities.
A state of emergency has been declared on the education sector by the Nigerian government, with millions of children who go to public schools being denied a quality education.
Invest in human capital
Most of the world's population is concentrated in cities. Nearly two-thirds of the world's population is urbanized. But only a fraction of urban population generates income. People living in cities have disposable income. In Nigeria, 30% of the population is under the age of 15. And there are more than 70 million people in poverty. So, Nigeria needs a strong economy and skilled workforce that will generate high incomes. The right policies and investments in human capital can help Nigeria address these issues.
Invest in infrastructure
There is a need to improve infrastructure. The power sector in Nigeria is inefficient. It is inefficient because Nigeria does not have electricity.
Build the next generation of Nigerian leaders
Over the years, we have seen many talented Nigerians get educated outside of the country. They have been taken in by the lure of a great education, free of charge. After years of attending university, they return home, but then realize they cannot get any meaningful work here because they lack the necessary skills or the necessary connections to get a good job.
These Nigerians find great work abroad or in neighboring African countries, but this is not a realistic option for all Nigerians. To grow the country's middle class, the next president should look at ways to build the next generation of Nigerian leaders.