“Nigeria Is Not An Oil-Rich Country”.
I am sure a lot of people will not agree with my position but a quick look at the information available will confirm my position. Nigeria has the 10th largest Oil Reserve in the world and we are the 6th largest world exporter as at 2012. Nigeria has the largest Oil reserves, and the largest exporter in Africa but the population is in the region of 160 million people, which means we are not oil-rich country when compared to countries like Kuwait, even Angola, Equatorial Guinea and Cameroon on income per capita basis.
“Nigeria Is Not An Oil-Rich Country”.
I am sure a lot of people will not agree with my position but a quick look at the information available will confirm my position. Nigeria has the 10th largest Oil Reserve in the world and we are the 6th largest world exporter as at 2012. Nigeria has the largest Oil reserves, and the largest exporter in Africa but the population is in the region of 160 million people, which means we are not oil-rich country when compared to countries like Kuwait, even Angola, Equatorial Guinea and Cameroon on income per capita basis.
DPR (Department of Petroleum Resources) conservative estimates pegged our crude reserve around 37 Billion Barrels. NYMEX (New York Mercantile Exchange) and WTI (West Texas Intermediate) daily crude Oil Futures Prices hovers around $100 today.
Nigeria even though the country with the largest reserve and largest exporter in Africa has the least oil resources per capita. When you multiply 37 Billion Barrels by $100 you have $3.7 Trillion divided by 160 Million inhabitants, every Nigerian has $23,125 accruing to them.
Assuming every Nigerian gets $23,125 and the money is saved in an interest yielding mutual fund, the long term rate on such fund is always hovering around 5-7%. So that means $23,125 of say 5% rate will yield approximately $10,000 per year per every Nigerian. That also is gross because the existing JV’s (Joint Venture Partnership) with all the IOC’s (International Oil Corporations) ceded 60-70% to Nigeria and the remaining 30-40% to the IOC’s because the IOC’s needed to be paid to explore, produce, transport and market the products globally that means we have about $6,000-$7,000 accruing to every Nigerian for life.
If we do the same calculation using Kuwait as an example with a population of 2.7Million (July 2012 estimate) with proven crude oil reserves of about 96 billion barrels (15.3 km3), i.e., about 9% of world reserves. Petroleum accounts for nearly half of GDP, 90% of export revenues, and 95% of government income. Approximately $3.6Million accrues to every citizen and if the money is saved in an interest yielding mutual fund with a rate of 5% it will yield approximately $180,000 per year per every Kuwaiti. Assuming they have the same JV partnership with the IOC’s, every Kuwaiti will have $126,000 yearly accruing to them for life.
I think Nigerian government needs to stop the wholesale dependency on Oil export and diversify the economy. We need to adopt fresh strategies in form of micro economic stability, building of infrastructures, curtail our debt ratio, containment of inflationary pressures and the rule of law. For any economy to develop export driven development strategy need to be adopted and that means we cannot depend only on oil export but many other products.
Quoting Simon Kolawole Thisday Newspaper Columnist (“One of my secret fantasies, let me divulge it this morning, is to fly to Europe someday and see Oando gas stations along the road, Dangote spaghetti at the supermarkets, Glo SIM cards at the corner shops and Ezekiel Izuogu’s Z-600 car on the motorway. Laugh at me if you like, but so did the world laugh at the Japanese when they started copying American technology.
Made-in-Japan used to be a butt of jokes – just as we laugh at Made-in-Taiwan today – but you can imagine how Japanese cars and electronics later went on to dominate the world. Who says Nigerians cannot do it? Who says Nigerians should only be associated with 419, terrorism, graft and substandard jobs?
Its funny but what is wrong if we have Ofada Rice in fanciful packs displayed on the shelves at Sainsburys, Tesco, Asda and Waitrose stores in Britain plus Wal-Mart and Target stores in United States. Already some guys into farming are exporting “Ugwu Leaves” abroad. Nigerian special delicacies can be exported just like the Chinese exported their dishes to the whole world.
It’s a bit quiet in the Mining Sector lately whereas this is a sector which is meant to be a cash cow for our economy. The mining of minerals in Nigeria accounts for only 0.3% of its GDP, due to the influence of our vast oil resources. The domestic mining industry is underdeveloped, leading to Nigeria having to import minerals that it could produce domestically, such as salt, cement and iron ore. The following minerals are vastly deposited in the country and remain yet untapped for economic use; Coal (Lignite and Coke),Gold, Columbite, Tantalite, Bitumen, Iron Ore, Limestone and Uranium.
Gold-deposits are found in Northern Nigeria, most prominently near Maru, Anka, Malele, Tsohon Birnin Gwari-Kwaga, Gurmana, Bin Yauri, Okolom-Dogondaji, and Iperindo in Kwara State. Production began in 1913 and peaked in the 1930s. During the Second World War, production declined. Mines were abandoned by colonial companies, and production never recovered since then
Columbite and Tantalite are ores used to produce the elements niobium and tantalum. Columbite and tantalite are collectively known as coltan in Africa. Tantalum is a valuable rare element used in electronics manufacturing mostly in computers. In Nigeria, pegmatite deposits of coltan are frequently also the source of several precious and semi-precious stones such as beryl, aquamarine, and tourmaline. These pegmatites are found in Nassarawa State near the Jos Plateau, as well as in several areas in southeast Nigeria. There is small-scale mining of these minerals. We need to note that Coltan is actually biggest source of revenue in Democratic Republic of Congo after diamonds, it’s a multi-billion dollar revenue earner in that country.
Bitumen was first discovered in 1900, with focused exploration beginning in 1905. Bitumen deposits are found in Lagos State, Ogun State, Ondo State, and Edo State. Conoco Oil has performed a technical and economic evaluation of these deposits, and believes there to be over thirteen billion barrels of oil in these tar sands and bitumen seepages. I think Canada is the only country in the world with reserves of Bitumen larger than Nigeria, yet our leaders prefer to pay lip service to the sector.
Recently, several important uranium deposits were discovered in Cross River State, Adamawa State, Taraba State, Plateau State, Bauchi State, and Kano State by the British Geological Survey. Nigeria has several deposits of iron ore, but the purest deposits are in and around Itakpe in Kogi State.
In conclusion this will serve as a warning to the ethnic jingoists from Niger Delta beating the drums of war that if the incumbent is not re-elected they will make the country ungovernable come 2015 and the chants of its “Our Oyel” from them will be totally uncalled for because every part of the country is actually blessed and in the event that the incumbent loses the election and they decide to disrupt production activities, it will be a case of “To Thy Tent Oh Israel”. Nigeria is a resource rich nation but our problem lies in the fact that we have total dependency on crude oil without exploring other alternatives.
In the same vein leaders from the North most especially the Governors rather than squabbling over attendance of the Northern State Governorship Forum or who among them will take a shot for the Presidency should rather concentrate their effort in developing the untapped vast mineral sector in that region which will translate to Human Capital Development thereby reducing or eradicating incessant cases of Religious Intolerance, Armed Insurgency, Boko Haram Militancy and Almajiris in their society.
Femi Ogunsanwo is a Political Analyst and Social Commentator ([email protected])
The views expressed in this article are the author’s own and do not necessarily reflect the editorial policy of SaharaReporters
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