By Kingsley Omose
The drama playing out in the oil and gas sector between the Nigerian National Petroleum Company (NNPC) Limited and Dangote Refinery LPZ in a way mirrors the clash going on in the political arena between the advocates of the status quo and those who want to chart a new way forward, and this has implications for the future of Nigeria.
For decades, Nigeria used earnings from its vast oil and gas resources to fund a consumptive lifestyle for its people. While the politicians in power, and the military before them were left to spend government revenues as they liked, they responded by having policies which were literarily bribes to Nigerians.
These bribes constituted of the provision of subsidised petroleum products and electricity, and with a near abscence of tax collection from Nigerians who in turn expected free health care, free education, security, and good infrasture as the bare minimum from their leaders whether military or political.
And because the oil and gas production was there to provide US Dollars that had no bearing on the productivity or unproductivity of the Nigerian people, importation became the norm to satisfy the love of Nigerians for the good things of life that money can buy.
Like the proverbial ostrich that buries its head in the sand and is oblivious to the realities, no one bothered to plan for the future and so as the Nigerian population grew exponentially, revenues from oil and gas production became increasingly unable to fund Nigeria’s consumptive economy.
Resort to local and external borrowings by government including the printing of tens of trillions of Naira in an effort to continue to keep afloat Nigeria’s consumptive economy have only succeed in worsening the quality of life of Nigerians and made living conditions in the country hellish.
Violent groups mostly made up of young people whether as cultists, militants, terrorists, armed robbers, kidnappers, agitators, 419ers, or thugs, have sprung up and are charting their part, and along with the abuses in the corridors of power and the failings in the security services, all these make for a very combustible environment.
There are those who believe ramping up oil production to at least 4 million barrels of oil per day and increased monetisation of vast gas resources even if this is done at the expense of Niger Deltans, will increase US Dollar earnings to refloat Nigeria’s consumptive economy and it will be business as usual.
This is unrealistic because there is no other country in the world like Nigeria with a monoproduct economy that has over 210 million people where 70% are below the age of 30, 42% are under the age of 15, and that has the largest population of young people in the world with a median age of 18 years.
As the Word of God says, Where there is no revelation, the people cast off restraint (Proverbs 29:18). This is the crux of the matter, that there are not enough productive activities going on in Nigeria to adequately engage the productive energies of at least 70% of Nigerians. In other words, for those we regard as the energy of the future, Nigerians below 15 years of age who constitute 42% of the population, their future is characterised by even greater HUSTLE.
This is the context in which to view the conflict between the poster child of Nigeria’s consumptive economy, NNPC Ltd with close to 6000 employees that on the average earn N100 million each going by its yearly N600 billion wage bill, and Dangote Refinery with over 15,000 employees that can produce petroleum products both for local and international consumption.
What Nigerians need to understand is that while Dangote Refinery may have had a long gestation period, an ecosystem was created in Lagos State that enabled this poster child for Nigeria’s emerging production economy to see the light of day, and principal to that was the political stability in Lagos State.
It is with this understanding that Nigerians should welcome and endure the twin pains of petroleum products pricing deregulation and the floating of the local currency, the Naira which have caused inflation to hit hard the pockets of Nigerians. Nigerians must endure this transition to secure the future of their children.
It is with this understanding that Nigerians should endure the regular collapse of the national power grid and power outages despite increased electricity rates because the country is transitioning from a consumptive to a productive economy in order to productively engage those who have the energy of the future.
The need for the passage of the following pending bills in the National Assembly: the Ministry of Finance Incorporated (Establishment) Bill, 2023, the Investments and Securities (Repeal and Enactment) Bill 2024, the Joint Revenue Board of Nigeria (Establishment) Bill, the Nigeria Revenue Service (Establishment) Bill; the Nigeria Tax Administration Bill, and the Nigeria Tax Bill, should also be viewed with this understanding.
Additional reforms will be required in the mining sector to attract the big players while local steel manufacturing will be needed to meet the developing demands of a productive economy for rail tracks, trains, bridges, skyscrapers, automobiles, aircrafts, ships, and much more.
In time, the reforms will shift to governance and electoral reforms, educational and healthcare reforms and such as will be required to reposition this tithe of the blackrace in a changing world where the instability released into the global order from January 20, 2025 will fundamentally change the world order as we know it today.