Oil is a wasting asset, why are we so addicted to it?

The oil industry is the benchmark by which the Nigerian economy rises or falls. But the cliché of this predicament is that it has been a wasting asset. Its value determines the fate of industries with no direct connection to it. Its environmental damage has created a legacy of destruction so severe it will take generations to resolve, if it can ever be full fixed. Its social damage has been even more extreme. It is a curse to the people and to the area. The people cannot farm. They cannot hunt. There are no industries, no new innovation centres. There are no longer even the headquarters of the oil companies that extract and sell the oil. At least when they were located in the region there were the associated jobs, the indirect industries and the value that came with it. Value which I believe exceeds the value of the derivation the states receive for production. Today, there is nothing but oil and all its consequences.

There is even a misnomer that Niger Delta youth now make so much money stealing or refining stolen oil, or joining cults and embarking on criminal careers, that it is an industry worthy of note, sufficient to provide some succour. It is not. It causes even greater environmental damage, jeopardises the health of all those involved, and most tragically, probably employs no more than 1% of the youth that needs jobs.

Are the Nigerian political class aware of this? I am not sure. When I worked in government we used to insist that all President’s, Ministers and Members of the National Assembly should go to the region for a two week retreat, see for themselves what reality looks like and ensure that their eyes are fully open when they make decisions. That obviously no longer takes place.

So what happens when the one industry that works in a region, also serves as its most destructive force? What happens when the only other alternative sector where returns can be made is government? The answer, is that you get a hugely destructive confluence of the absolute worst elements you can find. Cults, criminal gangs and militant groups become the biggest influence over our political system. What prospect does that represent for our future? A slowly deteriorating level of leadership, focused exclusively on consolidating the seat of power as a centre of enrichment.

That is why I laugh when I hear we are embarking on another marginal field round. Another attempt to stimulate growth (or lets face, share the wealth) of the region. But it is now doing so as part of a dying industry, and COVID-19 has shown us that we don’t even have the luxury of decades to prepare for its demise. Without it, what is there? When the flow of money dries up, Lagos State will find alternative revenue streams, other forward looking states have the time to focus on generating and building more sustainable industries like agriculture. Yes, the whole country will suffer, but it is the oil producing regions that will suffer most. There is simply nothing there without the oil. It is the cash from the oil that maintains any semblance of stability.

There is no longer any time left to delay the actions that can prevent this. I believe that COVID-19 has lost us a decade. Even if consumption of oil returns to pre-COVID-19 levels, the pace at which the industries that make it redundant are evolving, and the funding that they are getting is exponentially greater. Our comfort cushion has gone. So now we have to act.

We have to clean the area, and we have to do it now. You cannot bring sustainable economic activity to a wasteland. As we are cleaning it we need to progressively bring in the industries that can provide the volume of jobs that we need. The Delta has the potential to be one of the biggest contributors to the agriculture revolution that the Federal Government wants. But there is no plan to do so. There is no leadership. Someone needs to stand up and start taking action. If they don’t, all that faces us is calamity.

Source: Guardian

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