The Coronavirus and economic shutdown collapsed oil prices to $0 per barrel. This is one of the most important macro-economic events of our time.
One of the disturbing ironies of human history is “resource curse.” Nigeria and other 22 countries in the world derive at least 60 per cent of their exports from oil and gas. But sadly, none of the countries is a real democracy.
Nigeria is a prime example with the worst development outcomes of a resource cursed nation measured in poverty, inequality, and deprivation. Our history as Africa’s biggest oil-exporter shows that oil has in no way contributed to our freedom, peace, progress, and prosperity. Deposits of oil and minerals have often brought us tyranny, misery, and insecurity.
Our rich deposits of oil and gas make possible easy resource revenues. This eliminates the critical link of accountability between government and citizens. The easy money discourages incentives to tax other production activity. It prevents delivery of social services. It generates staggering wealth that facilitates corruption and patronage. It consolidates power in the hands of few wicked and greedy elites and regime supporters. It sharpens income inequality and stifles political reform. It leads to underdevelopment of agriculture and manufacturing sectors during boom times.
Rather than translate into higher living standards for the poor majority, revenue from oil often benefits only the few corrupt elites. Nigeria’s human development index remains at a miserable level. Our infant mortality rate remains one of the highest in the world. Our oil and gas revenues exacerbate ethnic rivalry and violent conflicts due to high levels of corruption, extortion, and poor governance that accompany resource wealth. This often generates grievances, crisis, chaos, and rebellion.
Even before COVID-19, everywhere you go in the 36 states of the federation, there is no evidence that Nigeria is an oil rich nation. No roads, no running water, no electricity, crumbling schools, no hospitals, no jobs, fear-gripped communities, hungry, haggard looking homeless, and hopeless citizens. University graduates turned ‘yahoo yahoo boys’, armed robbers, and prostitutes. There is complete breakdown of law and order. Everyone to himself, but God for us all.
Poor Nigerians, for now let’s celebrate the free fall oil prices! Far from being a blessing, our oil has been a curse. There is no rule of law. Corruption is out of control. Abundance of oil has led to oversize corruption, stagnation, and economic contraction. With $0 per barrel, it means the ruling elites will have little to steal, and little to embezzle. Let’s pray the oil prices stay permanently at basement prices.
As long as COVID-19 global lockdown continues, our enemies – destroyers of our people and nation – the wicked people in high places, will have nowhere to hide. The wheels of fortune turns and there’s nothing anybody can do about that.