arlier in 2008 and up to the last quarter of the year, the price of crude oil was at its all time high. Then suddenly, as if the plugs were pulled off, the price started crashing like a pack of cards. At its height, Nigeria was swimming in excess crude oil income, having set its budget at almost a third of oil price. Notwithstanding the disruption to Nigeria oil output as a result of the crisis in the Niger Delta, Nigeria was still raking in its share of the oil windfall. To the Yar'Adua's government, it was as if the blessing that the Obasanjo administration enjoyed was set to continue, but alas, the chicken had come to roost. Nigeria government suddenly discovered that the golden egg that had been laid by the abandoned goose might no longer be so golden.
With the global financial crisis hitting hard and the crumble of Nigeria's major source of foreign income, pundits were quick to point out that Nigeria's economic woes were just beginning to unfold. Granted that Nigeria is reputed to have about US$60 billion in foreign reserve, the question that arises in many quarters is how this has benefited ordinary Nigerians.
Some Nigerians, especially those in the Diaspora, favour the oil price crash. Why? Does it mean that they do not want Nigeria to garner enough foreign income? Of course, while they may be patriotic Nigerians, it has often been suggested, and rightly so, that during the high oil prices ordinary Nigerians did not enjoy the windfall as should have been the case through improved government services. In fact, it can be argued that it was the time Nigerians witnessed more power outage and general infrastructural failure.
In fact, why some of us that reside in South Africa for instance favour a lower oil price is that, the lower the cost of crude oil, the less we pay for fuel. For instance, at the height of the oil price increase in July 2008, the cost of fuel was about 10.50 rand per litre. However, with the continued drop of oil price, the price of fuel in January 2009 at the pumps is 5.82 rand per litre. Have we ever heard of fuel price reduction in Nigeria? There are various reasons advanced by the government why the ordinary citizens should not enjoy the windfall from the crash of oil price. Chiefly amongst them is that the government has been subsidizing the cost of fuel for Nigerians. In fact, they are even thinking of introducing fuel tax. When the price of crude was high, the ordinary Nigerians never benefited from the windfall, now that the prize is low, the ordinary Nigerian is meant to pay the penalty. What an irony! Commodities in Nigeria do not obey the law of gravity.
As much as Nigerians are said to have short memories, they still remember the unaccounted US$12 billion windfall from oil prices during the first Gulf war. During Obasanjo's eight year tenure, oil price was continuously on the increase. Instead of engaging in more public service oriented development, the administration thought it better to pay off in one swoop, Nigeria's foreign debt. While the payment of a country's debt is desirable, it does not make economic sense that money which could have been invested in the achievement of the Millennium Development Goals (MDGs), was used in paying debt. Whatever happened to the Abacha loot?
Maybe, the crash of oil price is a blessing in disguise for Nigeria. First, Nigeria must remember that prior to the discovery of oil in commercial quantity in 1956 at Oloibiri in present day Bayelsa state; it was earning its foreign income mainly through the export of agricultural products. It is time Nigeria went back to its roots; agriculture. The country is blessed with large expanse of arable and fertile land. All the government need to do is create the enabling environment for interested persons and corporations to go into large-scale commercial farming of food crops, cash crops and animal farming. Nigeria should rise up to the challenge of being the food basket of West Africa. Achieving food security should be topmost in Yar'Adua's administration, more so, since it is part of his Seven Point Agenda.
Secondly, the development of Nigeria's solid industry should be accelerated. Nigeria must be careful to avoid the repeat of the corruption of the oil industry to creep into the solid minerals industry. Sincerity is what is required. A situation where certain sections of the country hoard what solid minerals it has, hoping to use it in the eventual break-up of the country is very disingenuous. Nigeria is richly blessed with viable solid minerals which, if well managed, can diversify its economy, and help it realise its dream of being a giant of Africa.
Thirdly, the development of Nigeria's tourism industry will contribute to Nigeria's economy. However, it must be stated that tourism cannot develop in vacuum. The enabling environment must be created by the government, through the provision of functional infrastructure, and security of lives and persons, before private investors can make any impact. This, therefore, means that the government need to put more efforts into power generation and distribution, road construction and maintenance, crime prevention, detection and punishment strategies. The transportation industry must be up to scratch to guarantee tourists at least the minimum level of safety that the world can offer. As Prof. Wole Soyinka said sometime in response to Nigeria's quest as a tourist destination, that it is only masochists that would consider Nigeria as a tourist destination, if this area of the economy must yield its full potential, the attitude of Nigerians and the government towards fleecing foreigners must change.
Finally, accelerated industrialisation of the country would be the key to Nigeria's rise to its pride of place in Africa. The government should eschew apartheid oriented policies, and pump in the required funding to those areas of the country that have shown signs of taking the lead in transforming Nigeria to a modern day Japan of Africa. For instance, the famous Nnewi industrialisation efforts should be supported by the government. If the government lends its support to the development of that sector, Nigeria would in no time become the industrial hub of Africa.
If Yar'Adua's Vision 2020 is to be achieved, now is the time. We should see the oil price crash not as a curse, but as a blessing; a challenge to bring out our latent skills in turning the country around. Maybe, this oil price crash will help in solving the Niger Delta crisis, since oil will no longer be so attractive to die for.
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