No one should scare Nigerians with the expectation that the world’s migration from use of fossil fuel will plunge the Nigerian people into a desperate low. Only government revenue will be adversely affected.
When CEO Ben van Beurden, threatens that international oil company, Royal Dutch Shell Plc, may exit Nigeria’s oil sector, only public servants need fret. Their livelihood depends on revenue from upstream oil subsector.
They should fret when oil prices dip, Niger Delta militants lock up oil flow taps, or Organisation of Petroleum Exporting Countries reduces the barrels of crude oil that the country can produce in a day.
As it was said on the streets of Lagos, “Kan mi dá nínú òkú ìyá Adele?” When you translate this into the English language, it should mean, “Of what concern is it to me if the mother of (King) Adele died?” King Adeniji Adele was the Oba of Lagos before Oba Adeyinka Oyekan.
When he lost his mother, life continued in Lagos as if nothing significant happened. Only members of the family and their friends mourned. Lagosians continued to live their lives as they had always done– without any worries. They did not lose their sleep.
Sale of Nigeria’s oil and gas sector represents 65 per cent of the revenue of all strata of government in Nigeria, contrary to what obtains in most other countries where taxation is the major source of funding for government.
So naturally, it’s those mostly indolent, overpaid, underworked, public sector employees of every category that should be worried about any plunge in revenue from (especially) the upstream subsector of the oil sector.
N4.262 trillion or 33 per cent of Nigeria’s 2021 budgets is paid as all forms of emoluments to less than one million workers of the Federal Government. N1.378 trillion or 8.5 per cent is spent on other recurrent expenditure for public servants.
After the President, Major General Muhammadu Buhari (retd.), proposed N128 billion for the National Assembly in the 2021 Budget, the members unilaterally increased statutory transfers to themselves to N134 billion.
Maybe you’d like to know that the allocation is going to be spent on only 109 senators, 360 members of the House of Representatives, and their sundry aides and staff. You should remember that they also have the freebie constituency projects, that amount to wanton squandering of the nation’s inadequate commonwealth, tucked in somewhere in the budget.
You may be interested to know that in May 2019, the 8th National Assembly amended the condition of service so that NASS workers no longer retire at age 60 or after 35 years of service, as other government workers, but age 65 or after 40 years of service, whichever comes first. Who wouldn’t like to stay in a job that has security and long tenure?
In addition, N4.125 trillion or 30.4 per cent will be spent on capital projects, like infrastructure, which should impact the lives of the masses of the people, while another N3.124 trillion or 24 per cent of the 2021 budget will be dedicated to servicing debts.
As you know, most of the debt is acquired to fund overheads and white elephants which usually become abandoned projects. Government also has plans to obtain new loans of N4.28 trillion to offset the N5.02 trillion deficit of the 2021 budget.
Oil provides about 90 per cent of Nigeria’s foreign exchange earnings, which forms the bulk of proceeds that go into the nation’s foreign reserves that is used to finance import mostly consumer items, as well as fund the bloated bureaucracy.
One must however admit that petroleum products and the foreign exchange earned from crude oil affect every sector of Nigeria’s import-dependent economy: The perennially wrong-headed handling of these two directly affect the economy. As a result, the agricultural, agro-allied and industrial sectors that produce fast-moving consumer goods are all working sub-par.
The only way that Nigerians on Main Street have access to proceeds of offshore oil revenue is through what trickles down from emoluments of public servants, payments to government contractors, sundry donations and proceeds of corrupt diversions of public funds.
According to reports credited to Segun Awolowo Jr., Executive Director of Nigerian Export Promotion Council, “It’s not oil that is driving (Nigeria’s) Gross Domestic Product. Oil is just nine per cent, agriculture is about 27 per cent.
“What is driving (Nigeria’s) GDP (or more appropriately, the Nigerian economy), are services, financial services, communication services (that is, the telecoms), (and) IT services.” Awolowo claims that his figures are obtained from the Economic Recovery Growth Plan 2017-2020 prepared by the Federal Government.
In 2019, agriculture contributed 21.91 per cent, industry or manufacturing contributed 27.38 per cent and services contributed 49.73 per cent. With this reality, one would have thought that government should concentrate its efforts on agriculture, manufacturing and the service industry, so that more taxation will be realised therefrom.
But cynics suggest that it is easier to divert offshore revenue into private coffers than it is to convert tax revenue which is paid locally. This may well be so. Too few Nigerians are aware of how offshore revenue is recorded and received.
Economists Harold Sloane and Arnold Zurcher say GDP is the total value at current market value of all final goods and services produced by a nation’s economy. That is before deduction of depreciation charges and other allowances for business and other institutional consumption of durable capital goods.
The four major components of a country’s GDP are personal consumptions of goods and services purchased as well as income received in kind, business investments, government spending on goods and services excluding financial transfers like loans collateral.
Others are gross private domestic investments including inventory changes, new dwellings as well as net foreign investments or excess accruing to a nation from operations of international trade.
In more specific terms, these are: the primary sector, or the agricultural and extractive industries; the secondary sector or manufacturing industry; and the tertiary or service industry that facilitate the transport, distribution and sales of products of the other sectors.
Anyway, government hasn’t been doing much for Nigerian citizens who have been providing their own electricity using generators, water from boreholes, security with private guards and sometimes constructing bridges and roads to their homes.
This reminds you of Fuji musician, King Wasiu Ayinde Marshall, who complained aloud when he observed that fans, dancing to his music, neglected him and were pasting money on each other’s foreheads.
Recall that COVID-19 palliatives didn’t reach the citizens, until some of them, including security and law enforcement agents, helped themselves by looting the store houses. Neighbourhoods that got palliatives received measly rations that were inadequate for toddlers in a creche.
What all the Nigerian governments ought to be doing is to declare Marshall Plans to upgrade infrastructure, by public or private initiatives, and empower small-scale businesses to produce, and empower consumers to buy.
While one must admit that the Anchor Borrowers’ scheme that extends soft loans to farmers, and the textile industry intervention loans, are good steps in the right direction, much more still needs to be done.
Anyway, if oil revenue dries up today, only public servants will be affected. Nigerians, who have always looked after themselves, should just ignore government and its revenue drought.
