Nigeria Suffering From Severe Dutch Disease
Published on September 17, 2012 by pmnews · 1 Comment JETHRO IBILEKE/Benin
Prior to 1959, the Dutch country of Netherlands, then known as Holland, was well known for its industrialization, with its products exported to many countries. The country raised its foreign reserve with money earned from exportation. The discovery of oil in 1957 however brought a twist in the fortunes of the country. Its rulers turned all their attention to crude oil, crippling all its major industries in the process. Its foreign reserve that rose before then dropped sharply. The country learned the hard way that there was no alternative to economic diversification. That action gave birth to the expression: The Dutch Disease. Regrettably, though, many nations have not learned from the sad consequence of Dutch Disease, in fact, some, especially Nigeria, have deliberately ignored the lesson of the Dutch Disease by its over dependent on money made from oil exportation. Before oil was discovered in Oloibiri in modern day Bayelsa State, Nigeria was renowned for its cocoa from the west, cotton and groundnut from the north, coal from the east, palm oil and rubber from the Midwestern states. Proceeds from cocoa was used to develop the western states of Nigeria. Till date, the Cocoa House in Ibadan, Oyo state and the then Western broadcasting corporation television, the very first television station in Africa, are all reminders of those good old days. The groundnut pyramids of old Kano also reminds one of groundnut exportation. The oil windfall of the 70s also brought an end to Nigeria’s revenue diversification effort. Nigeria focused on oil, crippled agriculture, textile industries and other sources of revenue generation, with grave consequences, and ended up turning crude oil from natural blessing to curse. This set the stage for a two-day zonal advocacy workshop on economic diversification and enhanced revenue generation with a view to making the south-south zone thrive without oil. The workshop was held at Asaba, capital of Delta state between 10 September and 11 September. Host governor, Dr. Emmanuel Uduaghan, Godswill Akpabio of Akwa-Ibom and Adams Oshiomhole (represented by his deputy, Pius Odubu,) of Edo, emphasised the need to diversify the nation’s economy from oil revenue and the need to allow the various regions of the country to develop at their own pace in line with the principles of true federalism. The trio argued for the increase in the derivation revenue. They hinged this on the need to urgently address the degradation caused by oil exploration in the Niger Delta region, adding that the present 13 percent derivation formula was grossly insignificant compared with the environmental challenges confronting the region due to the activities of oil companies. “We still believe that 50 percent derivation should come to the region because of a lot of environmental degradation and poverty in the area. We need to mitigate the effect of oil exploration on our people, we need to clean up the seas and ensure that there are no more environmental damages. This involves a lot of fund and what is coming now is insignificant and 50 percent will be considerate. We want to appeal to our brothers advocating the removal of the on-shore/off-shore dichotomy that that is a no go area, the matter has been laid to rest for good,” Uduaghan said. Governor Oshiomhole said Nigeria must begin to look back at the yester-years when agricultural produce formed the main source of revenue for development. “It is imperative that action plans to regenerate the oil palm, rubber, as well as cocoa plantations are initiated immediately. Sufficient attention must also be paid to the solid mineral deposit that nature has bestowed on us,” he said. Governor Uduaghan further harped on the need for creating wealth outside oil by using funds from oil revenue to develop other sources of wealth, with the ultimate goal of empowering the...
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