SINCE crude oil was discovered in Nigeria, the nation economy has taken a mono-cultural dimension with total reliance on oil revenue. Prior to this period, being a country with vast agro-ecology and agricultural resources which enable efficient growth of various crops and animals, Nigeria’s economy flourished through Agriculture; Nigeria was a major exporter of cash crops such as cocoa, rubber, palm kernel among others and agricultural revenue was invested in salient infrastructural projects which are still in good shape for public use today. Agriculture was the backbone of Nigeria’s economic development, and it created wealth and jobs for the growing population. The import of agriculture in a state economy cannot be overemphasized; research has proven that it is difficult for any nation to attain a meaningful level of economic progress without developing her agricultural sector.
The scenario that followed the dependence on oil revenue in Nigeria has culminated into low infrastructural growth, corruption e.t.c. Despite bogus revenue generated from crude oil, the development in Nigeria doesn’t correlate with the high revenue generated from oil over the years. A large percentage of the population are still living in poverty in this oil era compared to the successes recorded in infrastructural growth, social welfare, job creation, healthcare and education in the pre-crude oil era in Nigeria. The current downtime hitting the global oil market has severe effect on economies of many countries in the world, Nigeria not excluded, the main focus of every government is to improve life for the people, both individually and as a whole, thus, we need to tackle wide-ranging measures to facilitate and speed up economic growth in Nigeria.
In recent years, oil producing nations under the platform of Organization of the Petroleum Exporting Countries (OPEC) have experienced significant fall in oil prices at the global oil market. The statistics below was drawn from OPEC’s global oil benchmark price history.
Year Currency Global Price
2005 US Dollar 50.59
2006 US Dollar 61
2007 US Dollar 69.04
2008 US Dollar 94.1
2009 US Dollar 60.86
2010 US Dollar 77.38
2011 US Dollar 107.46
2012 US Dollar 109.45
2013 US Dollar 105.87
2014 US Dollar 96.29
2015 US Dollar 52
Nigeria been the case study, below are the Oil Benchmark prices in the last 5 years:
Year Currency Global Price
2015 US Dollar 52
(approved by the Nigerian National Assembly for the 2015 budget)
2014 US Dollar 77.50
(Approved by the Nigerian National Assembly for the 2014 budget)
2013 US Dollar 75
(Approved by the Nigerian National Assembly for the 2013 budget)
2012 US Dollar 70
(Disclosed by the Nigerian Budget office in Abuja on 23rd of February, 2012)
2011 US Dollar 70
(Approved by the Nigerian National Assembly for the 2011 budget)
In view of the 2016 fiscal year, the Federal Government has proposed a benchmark price of $38 per barrel for the Nigerian oil. However, international financial organizations such as International Monetary Fund, and other financial experts have warned that the $38 dollar per barrel is not feasible for Nigeria, thus, they projected a $20 per barrel or less oil benchmark price. The fall in the oil price has positioned itself as a major challenge to the Nigerian economy, since oil accounts for larger percentage of the nation’s revenue; economic experts have suggested economic diversification as an antidote to the revenue crash in the oil market; therefore, Nigeria must look beyond oil. Economists, researchers and political analyst have suggested strongly that Nigeria should diversify to agriculture.
Agriculture isn’t new to the Nigerian economy, during total dependence on Agriculture; the sector has offered vast opportunities and employed over seventy percent (70%) of the Nigerian labour force. More also, the sector has provided food requirements for the country and raw materials for local industries, as well revenue from exportation of cash crops. Agriculture can not only be a major source of revenue for Nigeria’s economy, it is also the bedrock of Africa’s economy as a continent. The sector accounts for about 20% of Africa’s GDP, 60% of its labor force and 20% of the total merchandise exports. Agriculture is the main source of income for 90% of rural population in Africa. Agriculture represents a great part of the Africa’s share in world trade. On the list of 20 top agricultural and food commodity importers in 2004, 60% are from Sub-Saharan Africa. African countries represent also 50% of top 20 countries, in terms of the share of total agriculture/ total exported merchandise in the world.
Before oil, Nigeria’s economy was sustained with agriculture, today; it can still be sustained by the agricultural sector. Investment in agriculture generates high multiple effect with high economic and returns. The Nigerian government today has the rare opportunity to reignite agro-based economy in Nigeria, if the nation’s agricultural sector is vibrant, the current crisis in the oil market will not affect the nation’s economic sustainability.
Olawale Rotimi is a public affairs analyst