Breaking Nigeria’s dependence on oil revenue




As authorities continually depend upon revenue from oil which over the years has been on a downward slide, experts say the federal government should focus more on the non-oil sector to loosen the noose; BENJAMIN UMUTEME reports.

When oil was discovered in 1956 in Oloibiri in the present day Bayelsa state, after half a century of exploration, it was believed that it was only a matter of time before Nigeria joined the league of super rich nations. This led to Nigeria abandoning its agriculture sector which had been its main source of foreign exchange.

There began the profligacy of successive administrations, both military and civilian, with its attendant impact on not just the citizens, but the entire economy.

Sixty six years later, the country is yet to get the full benefit of its oil, with many saying it has become a curse.

Land use Act as enabler

In its bid to further strengthen its control on the abundant natural resources in the country, the then military government introduced the Nigerian Land Use Act of 1978, which abolished existing land tenure systems and replaced them with a uniform land administration system across the country.

All the existing tenure systems encouraged land holding without an obligation to develop them, fragmentation and uncoordinated alienation, hoarding speculatively for value appreciation and without precise documentation.

The Land Use Act was, therefore, designed to make land easily accessible to all Nigerians; prevent speculative purchases of communal land; streamline and simplify the management and ownership of land; make land available to government at all levels for development; and provide the system of government administration of rights that will improve tenure security.

Alas, that has not been the case as it continues to be a setback to sub-national governments who would have loved to develop their abundant resources. For instance, a state like Kogi cannot develop the mineral resources in the state because of the Land Use Act which grants that right to the federal government.

Speaking with this reporter on the foregoing, the managing Director, SD&D Management Limited, Gabriel Idakolo, said the Land Use Act has some inherent challenges that prevent the government from superintending effectively on land used for development and expansion of the economy with several cases in court.

“Many investors find land acquisition a major part of factors of production difficult so the government is always relying on the perceived easier option of reliance on oil revenue which has become unsustainable.

“Primordial sentiments as regards land use cannot be wished away and it has resulted to major clashes for example the (farmer/herders crises), majorly political and ethno religious sentiments have been the inhibiting factors with the governments at both national and sub national levels declining to act decisively,” Idakolo said.

For political economist and development researcher Adefolarin Olamilekan, the Land Use Act rather than help the states has helped to make them unviable. He told this reporter that it had led to a situation where states and local governments are uninterested in investing in resource exploration.

Olamilekan said: “It unfortunate that the Land Use Act cripples what could have been the best opportunity for the sub-national government to be more economically viable economically. But the reverse is the case due to what the Act has done, especially with ownership of resources underneath the ground.

“That is why states and local governments find it unattractive to invest in resource exploration and development. More so, the Act has placed the power to not to just explore the resources from the ground but also gave the federal government total ownership, licences and authorisation to determine how the land and every other thing on and underneath is developed.

“Sadly, this development robbed us as nations to be fixated on oil and gas exploration in this case.”

Continuing, he said: “Reasons are that every other resource that would have been wisely explored if the Land Use Act had not created that centralised owner called the federal government.

“We can be rest assured that sub-national governments across the six geopolitical zones would have taken advantage of the other several natural resources both solid and liquored to better their economic stay.

“Chiefly, since the Act has crippled them they left with nothing. And more saddening is the federal government’s poor attitude toward other resources exploration.

“In this regard, it has crippled initiatives that would have engendered state and local exploration of other mineral resources beyond oil and gas.”

According to him, both the political and economic considerations continue to play significant roles when policy makers make decisions.

“Here is what l mean, on the issues of politics we all believe that oil and gas as found majorly in the Niger Delta today should be explored maximally. Understandably, this is to serve the interest of the nation as against exploring the same in other parts of the country since it’s not in high quantity as it may be more expensive to do right now.

“However, the thinking of the Nigerian ruling class and players in the oil and gas sector is more of economic consideration going by the huge profits they are making from the sector, especially as the dealing in the sector is shredded in so many details that are confusing and unclear to understand.

“Expressly, this alone has created a huge gap as successive governments continue to reinvent the wheel of our dependence on oil.

“Instructively, this now is the bane of our underdevelopment, a situation that has crippled others forward in roads to diversify the economy beyond oil and gas. Painfully, we are not just politically incorrect, we have been economically unwise because we have been wasteful even with the oil and gas since we cannot refine crude locally.”

Harnessing technology

Idakolo pointed out that a technology can turn around the country’s current state if the leaders are ready to adopt it.

“Nigeria cannot afford to ignore technology which is an engine of growth all over the world, and visionary leadership involves making adequate plans for what will be obtainable in 10, 20 to 30 years from now. Although in the past those in leadership positions have capitalised on lack of technology to short change the masses but that maxim can no longer hold because the world has become a global village and any leadership averse to technological advancements will soon be swept away,” he said.

In the same vein, Olamilekan insisted that the roles of technology in the global economy cannot be over-emphasise, because it offers a spectrum of economic innovation.

“A look at every other sector has shown that technology is what keeps us alive, it is the means to boost the economy – beginning from the financial services to logistics, aviation, education, military, commerce, telecommunications, manufacturing among others.

“The survival of any country today is dependent on its ability to deplore technology. Complex engineering technology as production of cars, airplanes, computers, military hardware, equipment and machineries are the best bet, simpler technologies are also very imperative with the production of complementary products like motor parts, textile, and electronic sets, amongst others. And Nigeria of today cannot sit on the fence as other nations.

What to do

Going forward, the political economist said there is a need to review the Land Use Act.

“This is to align it with current reality on ground, especially to empower sub-national governments with impetus to be more economically viable with natural resources exploration and development. And in the long run, this could increase Internally Generated Revenues (IGR) of these states and local governments.

“Another is, we must collectively encourage the government to be more determined in its policy of economic diversification as this remains the only way for us to break the cycle of oil dependence. Seriously, this would improve our exports earnings also.

“Lastly, deploring technology to boost our economy is vital. Local technological innovations must receive massive government support and patronage. For this would go a long way to sustain our economy as well as reduce pressure on foreign reserves.”

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