Nigeria In The Post-Petroleum Era

Nigeria In The Post-Petroleum Era

Over the past few decades, Nigeria has emerged as one of the key political leaders in Africa. Despite a long history of under-performance, driven primarily by leadership and visioning problems, it remains a key global strategic partner. It has petroleum with the capacity to partly influence the dynamics of global commerce and industry.  Whether the youth is unemployed or oil pollution is destroying the ecosystem, the major concern of many trade partners is that oil is still flowing in Nigeria and the nation matters. Because of petroleum, many Nigerian leaders, in recent years, have enjoyed preferential treatments internationally, if only to ensure that neither they nor their restive youths interrupt the flow of oil. But as our oil reserve gets exhausted, or oil itself potentially disrupted by technology,  we will witness dramatic national transformations with enormous consequences.

The economic, political and institutional evolution in Nigeria since oil became the mainstay of the economy remain largely non-core-market parasitic gains fueled by high oil prices worldwide. Our nation has not decoupled her fate from oil as oil still dominates our foreign earnings. The progress we have made in agriculture before the dawn of petroleum is equivalent to the progress made in our traditional African medicine which remains largely lost and undocumented. So while we have knowledge, we have destroyed the process of our learning and experience. Years of poor policies have produced series of catastrophic convulsions that damaged our economic, agricultural, trade and intellectual capital and turned once a vibrant virtuous cycle into a vicious one.  They changed a bright modernizing economy with ruthless pragmatic agricultural program into one that cannot feed her citizens.

The challenge for Nigeria is not necessarily what happens now, but what happens when the oil wells dry up. In others words, what would be the position of Nigeria, politically and economically, when either the oil wells dry up or oil lacks its current global value because of  advancement in alternative energies.

The Political Stagnation

Our nation remains governed in a political system of extreme stagnation and avalanche partisanship. A system that breeds calamitous venom with capacity to destroy the heartbeat that keeps the nation moving forward. It has created a myopic syndrome that continues to prevent the nation from utilizing the gains of oil sales to advance the citizens, the infrastructures and give Nigeria a needed clout in the global arena. The devious resolute attitudes of our leaders to hold on to power at all costs despite staggering and monumental incompetence and the pathological states of the electorates to yield to bribes mean that change is not coming very soon. As the years go, the seasonal festival of hooliganisms called ‘elections’ will continue to alienate the sound minds of our land out of the political system. Redundant, archaic and outmoded systems of government that offer themselves to hijack by unpatriotic leaders keep stalling the fluidity  and adaptability of our nation, a once promised hope when African legends – patriots and men of our Greatest Generation -of Azikiwe, Awolowo and Bello pioneered shared investments and vistas for future growth. Ever since their days, government has become dysfunctional and politics has been defined as approving budgets and spending money on the social process of governance. Ceaseless and virulent debates about trivia have become norms and have failed to eliminate illiteracy, riots, insurgencies, secessionist movements, widespread poverty, exodus of talented citizens and unemployment in the society.

The nation has become one of no-big-dream because the leaders are entangled in managing government processes and political pandering instead of offering leadership with the ‘fierce urgency’ it demands. Many argue that Nigeria needs time to evolve; yet, they fail to understand that India is just 13 years older than Nigeria and has already emerged as one of the most innovative economies of the 21st century.  Nor do they understand China, which has transformed two centuries of western industrialization into, circa, a quarter century. These nations has adjusted, adapted and persevered over their different years of economic recklessness and invented themselves. Whether in communications, trade, discovery, commerce, infrastructure, property rights, civil societies, they have shown the world that they understand globalization and it is the efflorescence of the local and the modern. They are succeeding…

Oil pollution in the Niger Delta (source: Al Jazeera)

 

Excursion into a post-petroleum Era

An excursion into a post-petroleum Nigeria looks challenging. At last, the nation will come to reality after years of poor judgments and mismanagement which have caused deep pains and depressions on the citizens. The first challenge will be cleaning the empty oil wells. It is unbelievable that the oil companies, who despite knowing the public health and the environmental impacts of gas flaring continue to do it recklessly in Nigeria. We hope they will have the morality to clean those wells and restore them to pre-drilling ecological landscapes before they move.

Within Africa, Nigeria’s influence will be tested. Because our nation has not developed any creative technology that will sustain the economy after the petroleum era, some African nations will dominate us. South Africa will become like a hegemonic empire in Africa with extreme power. That nation continues to invest massively in education, giving Africa its best university, and attracting the best African brains. From banking to technology, South Africa will be unrivaled and will rule Africa. As the economies and political power of other African nations such as Ghana, Libya (which continues to deport Nigerians in hundreds) and Egypt grow; the capacity of Nigeria to define and influence in the African Union will shrink despite enormous opportunities for new Africa leadership to position the continent competitively. A unipolar African system lead by South Africa will emerge. Consider the facts that major telecommunication firms and banks in Africa remain controlled by South Africans and they are aggressively buying into key African markets daily.

As South Africa takes the central role, there will be broad impacts across the ECOWAS region. A post-petroleum era will produce massive complications and fundamental dislocations in Nigeria’s capacity to influence the region as South Africa becomes more prosperous owing to a highly diversifying economy. As it buys into more African markets, its abilities to influence governments will become more pervasive and that will dwarf Nigeria’s influence. Because of the rivalries in Abuja and unparalleled political interplays with their systemic wastes, Nigerians lacks both the economic and political energies to take South Africa. It is enjoying an excellent immigration system that drains Nigerians and other African intellectuals into its system while making life tough for uneducated ones. That nation’s economic success has produced political confidence and national pride with the impacts bubbling up in all major African capitals. Their economic consolidation will engineer power diffusion which will turn South Africa into an African imperium with the roadmap to a new African order. A post-petroleum era where all roads in Africa will lead to Johannesburg/Pretoria with South African ideas about economics, politics, and trade becoming the starting points in African dialogue.

South Africa understands the emerging era and has built political credits and democratic institutions which make them more credible and serious than other African nations. Egypt, Cameroon, Nigeria, Tunisia and Morocco remain stunned that the 1st FIFA World Cup in Africa was hosted by South Africa despite her lesser records in the competitions. Simply, South Africa represents Africa in infrastructure, economics, and trade and FIFA understood easily. She is already the African headquarters of all the major multinational firms. A critical examination of Mandela’s years as he anchored the foundation for modern South Africa shows that he understood that a nation’s path to greatness is rooted on economic policies, national cohesiveness, political stability, cultural creativity and technological success. His message of peace is central to his understanding of a new world where economy rules; days of empires of militarism and aggression are over. He envisioned a nation where sustaining competitive edge requires knowledge and technological capabilities that fuel innovation, i.e., capturing a continent through markets; and not bullets. He funded schools and engineered sound policies.

As Robert Gilpin noted, as a country’s power increases, it “will be tempted to try to increase its control over its environment”. Doing this involves expanding the political, economic, and technological systems as well as the international system to enable it advance its interests. Recently I saw an advert in the Economist for the ECOWAS currency. Owing to the success of Euro, the plan is bold and very much needed. The challenge, though, is not just the currency, rather, the capacity of the superpower (Nigeria) in the region to sustain the vision. Unplanned post-Nigerian petroleum era showcases a scenario where South Africa will emerge as the lender of last resort, holding the reserve currency and using their government and non-governmental forces to rule the region. ECOWAS markets are still fragile and evolving, but in all cases, these markets are driven by minerals, rather than created knowledge.

Lagos is an economic center that needs modern infrastructure (source: OSBC)

Though we have size, the 21st century is not necessarily a century of size. It is a century of knowledge-workers-population. It is either the size of Nigeria weakens it to advance faster from the challenges of the post-petroleum era or it helps it to leapfrog. But one thing is clear: the economic, diplomatic, and social power that will arise and how we would be perceived will be accidental and unfortunate (if there is no preparation). The evolution of million-dollar non-governmental institutions with progressive ideologies in solving problems has the capacity to become symbols greater than states. Because our world have emerged as one where power is progressively shifting away from states to individuals and organizations; the effectiveness to apply power centrally is diminishing.  This poses a problem is holding a unified union.

Nigeria’s economy could shrink with possible turbulence and restiveness. Because of the pivotal role of petroleum in the Nigeria’s economic landscape, a Nigeria without crude oil could be volatile. The major reason is that unemployment will increase and many government sponsored local programs will stop. From banking to education, everything will be redefined. Yes, without a central crude wealth to share and drive the national budget, sections of the economy supported by crude oil could suffer. There will be tendencies for more educated Nigerians to move abroad with potential strangulation on the economy. Nigeria could emerge as a true federal system from its present quasi-federal structure. While the Nigerian union will be continuously morphed to remain strong, the states will be expected to go back to fundamentals to develop ways to function because central funding will diminish. Without crude, assessing external (international) loan will be difficult and many Nigerian states will be challenged to be accountable and innovative with their resources. They will establish structures and institutions to create wealth and inter-states competitions will emerge. This will be followed by effective tax and revenue collection techniques.

From federal parliament to state assemblies, the political system will be revamped. The present system which is extremely expensive and supported by the largesse of the crude oil will be transformed. Some states will become creative in representative system in order to save cost. I see a scenario where some states will sponsor representatives on part-time with the number of positions reduced by half.  Yes, new politics will evolve and the democratic system will be seriously tested. There will be turbulence, but the nation will remain a union nonetheless. A post-petroleum era will break the hybrid system between Abuja and the oil wells of Niger Delta-a challenge for a new generation of ruthless realpolilik for change.

One cannot imagine what will happen to education in Nigeria if it cannot be funded properly with the enormous oil revenue. In the post-petroleum era, the present model of higher education in Nigeria will collapse and government will request schools to fund themselves with minimal central supports. Schools will have to become very competitive and innovative to attract grants and revenues to survive and grow. Unfortunately, it must still overcome the present lost years of decay perpetuated by poor funding and outdated model.

What Nigeria Needs To Do

What can be done? The nation still has lots of opportunities to prepare for the post-petroleum era. First, it has to invest in education. This is important as education remains one of the best ways to sustain any economy. It is an organic engine for national political and economic succession and catalyst for national prosperity. Because every nation has got a limit to its wealth creation without science and technology, Nigeria must invest in technology creation on agriculture, nanotechnology, biotechnology, manufacturing and Internet. We must position our nation to transmute from petroleum-driven economy to technology-driven one. Nigeria has to allow market driven-industrialization work by improving the necessary frameworks to make it possible. Government must boost scholarships for technical education.

Everyone knows that the greatness of America is from its higher education which remains its best industry. We have to push resources to elevate our schools to become centers of innovation and development. Our schools must be seat of future entrepreneurs, inventors and risk takers where ingenuity, quick thinking and problem solving are identified and nurtured. Also, our experts should develop better ways of measuring some of the human and economic statistics, at least for Nigeria. I do believe that some of the techniques in use do not make sense as they were developed decades ago. A system that will accurately measure the evolving interconnected global markets with newer technology, trade sophistications, and revolutions in financial instruments and investment dynamics. The present econometrics where education and R&D are logged together as consumption, rather than savings I think is faulty. That is why we may look good on statistics while the citizens are dying en mass.

Our economic system which has maintained inflation within double digits for the last few years has provided a rare celestial mechanism to move us forward.  A vision of diversifying the market is urgently needed. We have not tapped the enormous potentials of Internet because broadband communication has not diffused into the society. There are lots of opportunities which can employ thousands of Nigerian if web-based technology and broadband technology are developed. The government may consider giving major tax incentives in this area to help massive private sector investment to drive the market. That should be followed by standardizing the e-payment system which is increasingly moving forward with some latest innovations from the banks.

Politicians test Aba shoes. Aba needs support on electricity (Source: Buzz Nigeria)

Our economy must be diversified towards evolution of potential synchronous regional growth sources across all states of our nation. This will drive an efficient, business-friendly regional system that will support the present effervescence in our economy.  A system that will move us from potentially episodic and ephemeral achievements of the present capital markets to a diffused learning that will transform artisans, traders, sculptors and farmers and move them up to learn and apply at higher levels. It also has to offer programs in form of support for small and medium enterprises (SME). The apparent failures of many banks and firms have had negative ripple effects in our economies and efforts must be developed to ensure we curtail failures of economic and business institutions. Fortunately, our present financial system looks strong; we need to sustain it through transparency, adjudication and enforcement.

We must build a deep, big and liquid African capital market to finance major turnaround in manufacturing, technology evolution, advances in agriculture and some of our petroleum projects. We need lots of fluidity, resourcefulness, resiliency and reliability to be nimble and successful. We need major African IPOs (initial public offers) to occur in our stock exchange to generate revenues in our market and overall vibrancy towards becoming a hub that will connect Africa’s market. As we move towards ECOWAS currency, we have a duty at hand. We need to move from the economics of land and labor to that of ideas because that is what rules the world. The Change Initiative must not just plan for the adjustments necessary within the next decade, but must develop strategic and tactical visions required for the economy to maneuver any upheaval which would occur as the oil wells dry and our foreign earnings draw down.

As China expands it trade and economic ties with Nigeria, it is very important that government provides lots of oversights in the projects. We expect these ties to increase as China continues its quest for more raw materials and sources of energy to support its colossal economy. The multi-billion naira railway project which was financed by China remains in a pitiable position.  As they carve out percentages from military, economic, political and technological spaces occupied by the Western nation for years, we need to ensure we get the best from the partnership.

Nigeria needs a new campaign on Nationalism to enable us achieve great success through societal energy. It must be based on substance, and fueled by visible economic roadmaps for all citizens. Nationalism will bring Nigerians to return back from abroad with money, investment ideas, global standards, networks and passion to build our nation. They will help develop a national pride and confidence and geopolitical strategy with skill and effectiveness to harness our national power for national purpose by using our cottage of intellectuals, artisans, professionals and patriots.

As a little boy growing up in Ovim, Abia State, I experienced the ingenuity of Nigerians especially during the Babangida’s Structural Adjustment Program and the cassava mosaic disease that destroyed cassava farms in eastern Nigeria. The intellectual capacity of Nigerians to act under pressure was measured by the swift reaction of the research agencies to develop a new breed of cassava that was resistant to the disease. Barely a sophomore in a secondary school, I took the invaluable suggestions from my agricultural science teachers to our farms; we survived the ‘famine’ that was created by man and Nature concurrently. Whenever I recall that experience and the present problems of road and electricity, I am convinced that Nigerian leaders have failed to engage the citizens with resources necessary to move the nation forward.

Can our nation display that will of using science to solve problems and get this nation on the path of prosperity? Our national attitude today will determine where we will be when the oil flow stations will be overtaken by weeds.

We need leadership. That is the only hope to prepare the nation for this post-petroleum era. From electricity to road networks, Nigeria has the capacity to provide and sustain them; we are smart, ingenious and optimists. Just a leader with capacity to rally the nation in honesty, hard work and raise our imaginations beyond where we are today and move us to believe in ourselves and create the tools to make us build our nation. It would be a leader whose goals will not just be to keep government running, but one who can help the nation dream a bigger, larger and glorious vision that generations of Nigerians will unite for. Someone who can create a society to engage our brightest minds in government by evolving a new political system designed to solve problems, rather than holding offices. A person who can engineer Nigeria into rebirth and restoration to offer a prosperous nation that is colorful, fluidic, vibrant and open for change. Someone who will help us solve our problems instead of thinking that World Bank and IMF will. Yes, a person of immense intelligence, competence, pragmatism, and unimpeachable. A person of integrity, broad knowledge, enormous vision and solid experience; one that can stimulate more vibrancy in the private sector and move the public sector out of its stasis. He must tackle corruption and stabilize democracy. And yes, give us electoral reform to remove stagnation, circuitous legal component and time-waste to get parliament focused on their work as soon as possible after elections.

Nigeria must work hard to restore her dignity and recover her place in the world. She must build confidence and re-image herself to cushion the impacts of turmoil that will happen when the oil wells will dry. This cannot come by press releases or whining on embassies to respect her citizens; but rather, by understanding and effecting the fundamentals of investments in education, infrastructures and good governance. As it remains a major power in the ECOWAS region with a total portfolio of military, economic and political dominance, it must add educational dominance. Our challenges in Africa are not coming from bombs, rather, the capacities of competing African nations to get the first manufacturing plants from Dell, Intel, HP, AMD, IBM, etc.  Preparing for a new model of outsourcing with central theme on Africa is a matter of time and our nation has to be ready. That readiness is political stability, sound education and excellent infrastructure that will provide the foundation for creating technology; over just consuming it as we largely do today.

Nigeria has to be a leader in banking, shipping, insurance, investment and a center of African commerce with holder of much of the reserve currency. Our economy has to be built on the triple force of information technology, knowledge and globalization. It has to be robust, modernizing with no rigidity. It is well known that the demise of the British Empire came when wealthy British focused on studying literature and philosophy over science which had given them edges for generations in ruling the world. A story of that nation shows us that without strong economy, geopolitical strategy will crumble as England’s case is more of economic suicide than political. For a nation to be great in the 21st century, it needs to lead in innovation, technology diffusion, energy and entrepreneurship with a competitive economy. This should be followed by supporting the private sector through infrastructure development, property rights, independent courts and rule of law focusing on innovations in science and technology and diversifying the economy into services, agriculture and industry.

Africa and indeed the whole world are emerging with enormous challenges and opportunities. As the twilight era of petroleum arrives, either by the wells drying up or advancements in alternative energy sources diminishing its global importance, Nigeria as a nation must plan to transmute into the inevitable post-petroleum era. That planning must be holistic, innovative and fluidic and offer pragmatic mechanisms for cooperation and conflict management, economic vibrancy, and technology creation. A Nigeria of openness- to goods and services, ideas and inventions, people and culture- where all tribes will share in unified dream and destiny of unlimited promise and hope. Yes, it must be done with civility without ideologies of expansionism, aggression and regional disruption. Let’s start the planning because the oil reserve is reducing in hundreds of barrels as you read.

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