Our perpetual dependence on crude oil is setting us up for a catastrophe of biblical proportions

 

By Ayo Akinfe 

(1) Later today, Norway’s Parliament is expected to approve plans by the government’s $1trn to divest from all oil and gas exploration companies. This is part of a radical programme to signify that Norway as a country is moving away from fossil fuels and is firmly in the clean energy camp

(2) Now, Norway’s crude oil output is kind of similar to Nigeria’s. They currently have an output of 1.5m barrels a day but over the last 45 years, the annual average has been 1.67m barrels a day. In July 2000, their production hit an all time high of 3.4m barrels a day. Traditionally, Nigeria’s Opec quota has been 2.5m barrels a day, although at the moment output is 1.68m barrels a day 

(3) Norway and Nigeria have similar sized gross domestic products (GDPs) of around $400bn but alas, they have an industrial base too. Norway is also a country steeped in social democracy where things like employee rights, primary healthcare, universal education, public services such as trains, care for the elderly, kindergartens, disability benefits, etc are part of the national psyche. In Nigeria, it is dog eat dog. You are on your own 

(4) Given that Norway only has a population of about 5.3m it clearly has a much higher per capita GDP than Nigeria but that should be expected as it is located in one of the most inhospitable places on earth. No matter how much you paid me, I would never go and live in the freezing cold of Scandinavia. They are never going to be as populated as us 

(5) Back to the issue of oil and gas now, Norway has the world’s biggest sovereign wealth fund but is pulling it out of the energy industry. Should this not send alarm bells ringing across Nigeria that the days of fossil fuel are limited? What basically will happen is that Norway’s Government Pension Fund Global will divest from 134 companies classified as belonging to the exploration and production sub-sector

(6) If you want to know how unserious we are as a nation, ask yourself what have we ever done with our own sovereign wealth fund. Indeed the World Bank recently classified Nigeria’s sovereign wealth fund as the second worst run such fund in the world. Set up originally as the Petroleum Trust Fund (PTF) by General Abacha with Buhari as its chairman, the PTF later became the Excess Crude Account under Obasanjo and the Sovereign Wealth Fund (SWF) under Goodluck. Basically, Nigeria’s budget is predicated on $60 a barrel, so any revenue in excess of that goes to the SWF. If crude is selling for $70 a barrel, $10 for every barrel goes into the SWF

(7) Were we a nation of serious people, the capital in the SWF would have been widely invested in capital projects such as railway networks, ports, airports, toll roads, etc. One of the biggest crimes against Nigeria was what happened during Goodluck’s tenure. He and his pals decided to share the proceeds of the SWF among themselves, so the state governors rightly demanded their own share. Those greedy governors got their share and used some of it to pay salaries and pocketed the rest in typical fashion 

(8) Today, seeing the way the green movement’s influence is growing across Norway, I am in no doubt that this capital in the SWF will be invested in clean energy like solar farms, windmill farms, recycling plants, etc. In contrast, we in Nigeria think crude oil will be around for ever, so do not even get the clean energy debate. Only Ben Bruce-Murray appears to understand the issues. How I want that gentleman to run for Bayelsa State governor

(9) A combination of factors, including the increased manufacture of electric cars, international trade disputes, the availability of alternative sources of energy, etc will soon make crude oil extraction unprofitable. If a barrel of oil costs $30 to extract but only sells for $10, only a madman ready for admission into the lunatic asylum would continue investing in such an industry. It is time to focus on manufacturing, agriculture, tourism, etc my people ooooo. We will be on the road to sanity the day one state governor says he no longer wants federal allocation

(10) Nigerians simply do not get it into their heads that this dependency on oil is a recipe for an impending catastrophe of biblical proportions. We are already seeing signs of it with the Fulani herdsmen saga as oil revenue fails to reach them. When the crisis will strike the rest of the country, we should brace ourselves for devastation on a par with Sodom & Gomorrah or Hiroshima & Nagasaki. A word is enough for the wise!

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