Business Opportunities in Nigeria 2012: THE PARADOX OF A RICH – POOR NATION

By MUIDEEN ADEBAYO IBRAHIM

Nigeria, officially the Federal Republic of Nigeria, is a Federal Constitutional Republic comprising 36 States and its Federal Capital Territory, Abuja. The country is located in West Africa and shares land borders with the Republic of Benin in the west, Chad and Cameroon in the east, and Niger in the north. Its coast in the south lies on the Gulf of Guinea on the Atlantic Ocean. The three largest and most influential ethnic groups in Nigeria are the Hausa, Igbo and Yoruba. Nigeria has an area of 923,768 Square Kilometers with a population of 140,003,542 according to 2006 population census but with an estimated population of 170,123,743 in 2012.

However, on 1^st October, 1960, Nigeria gained its independence from the United Kingdom. Nigeria’s government was a coalition of conservative parties: the Nigerian People’s Congress (NPC), a party dominated by Northerners and those of the Islamic faith; and the Igbo and Christian-dominated National Council of Nigeria and the Cameroons (NCNC) led by Nnamdi Azikiwe, who became Nigeria’s maiden Governor-General in 1960. Forming the opposition was the comparatively liberal Action Group (AG), which was largely dominated by the Yoruba and led by Obafemi Awolowo. The cultural and political differences among Nigeria’s dominant ethnic groups: the Hausa (‘Northerners’), Igbo (‘Easterners’) and Yoruba (‘Westerners’) were sharp as posited by Wikipedia.

An imbalance was created in the polity by the result of the 1961 plebiscite. Southern Cameroon opted to join the Republic of Cameroon while northern Cameroon chose to remain in Nigeria. The northern part of the country was now far larger than the southern part. The nation parted with its British legacy in 1963 by declaring itself a Federal Republic, with Azikiwe as its first President. When elections were held in 1965, the Nigerian National Democratic Party came to power in Nigeria’s Western Region.

Prior to Independence, Oil was discovered in Oloibiri in the Niger Delta in 1956 and Nigeria has been confronted with a lot of challenges since then to date. The question is: Is Oil discovery in Nigeria a blessing or a curse?

According to MBendi, the discovery was made by Shell-BP, at the time the sole concessionaire. Nigeria joined the ranks of oil producers in 1958 when its first oil field came on stream producing 5,100 bpd. After 1960, exploration rights in onshore and offshore areas adjoining the Niger Delta were extended to other foreign companies. In 1965 the EA field was discovered by Shell in shallow water southeast of Warri.

In 1970, the end of the Biafran war coincided with the rise in the world oil price, and Nigeria was able to reap instant riches from its oil production. Nigeria joined the Organization of Petroleum Exporting Countries (OPEC) in 1971 and established the Nigerian National Petroleum Company (NNPC) in 1977, a state owned and controlled company which is a major player in both the upstream and downstream sectors.

Despite its major problems of civil unrest, political instability, border disputes, corruption and poor governance, international oil companies have always seen Nigeria as an attractive area for upstream investment. Exploration has taken place in five major sedimentary basins, namely, the Niger Delta, the Anambra Basin, the Benue Trough, the Chad Basin and the Benin Basin. The most prospective basin is the Niger Delta which includes the continental shelf and which makes up most of the proven and possible reserves. All oil production to date has occurred in this basin.

Nigeria is the 12^th largest producer of petroleum, 8^th largest exporter and 10^th largest proven reserves in the world. Petroleum plays a large role in the Nigerian economy, accounting for 40 percent of the Gross Domestic Product (GDP) and almost 90 percent of Government revenue.

Infact, since the discovery of Oil, the Government went to sleep and successive government care less about Agriculture which used to be the major source of revenue before the discovery of oil.

Despite the huge revenue that had accrued to the Government from 1956 to date, the Nigerian people have nothing to show for it. Rather, the more revenue from oil, the poorer the people become. A lot of Nigerians are now scavengers in their own country. Nigeria is now ranked as the 28^th poorest amongst 42 countries in the world whereas, the country is sitting on Gold, the only challenge is that we do not have good managers and administrators who could harness all the resources we have together and make living worthwhile in this country.

Aside from Oil and its by products that are found in abundance in Nigeria, the country is blessed with a lot of Mineral Resources. Each State of the Federation has one Mineral Resource or the other as enunciated below:

As can be observed from the table above, each State in Nigeria is naturally endowed. We only need Good leadership and Governance . Aside from that, each state of the Federal can take care of herself without going cap in hand to the Federal Government for joint revenue. Unfortunately the Federal Government would not let go and allow each State to tap the mineral resources.

Despite all the resources in this country, it is sad and disheartening that the country is seriously showing signs of a failed state.

A failed state is a state perceived as having failed at some of the basic conditions and responsibilities of a sovereign government. In order to make this definition more precise, the following attributes, proposed by the Fund for Peace, are often used to characterize a failed state:

• Loss of control of its territory, or of the monopoly on the legitimate use of physical force therein,
• Erosion of legitimate authority to make collective decisions,
• An inability to provide public services, and
• An inability to interact with other states.

Often a failed state is characterized by social, political, and/or economic failure.

Common characteristics of a failing state include a central government so weak or ineffective that it has little practical control over much of its territory; non-provision of public services; widespread corruption and criminality; refugees and involuntary movement of populations; and sharp economic decline.

An average Nigerian is now looking for the slightest opportunity to go out of this country because of the harsh economic conditions. A visit to any Embassy will reveal a lot of things to you that Nigerians are tired of the way and manner they are governed. There is serious decay in all the sectors of the economy.

Corruption is now legalized, politicians and government officials are involved and those who are found culpable are normally left off the hook after the rigmarole. Ibori was left off the hook only to be found wanting by the London Court. The Economic and Financial Crimes Commission (EFCC) appears to have lost steam despite Millions of Naira voted for the Commission to ensure that it is effective and efficient. It is now theater of the absurd in the law courts.

Unemployment is on the increase, Infact there is no job anywhere. The Private Sector that would have employed people is seriously handicapped because of erratic power supply, inadequate/lack of infrastructural facilities.

The economy is in a state of shambles and the Central Bank of Nigeria (CBN) that is saddled with the responsibility appears hapless and not getting it right because of the unfriendly policies and policy somersault. The CBN Governor is more concerned with more rhetorics and less action. The Banking Reform led to more un-employment because some Banks laid off their staff.

The insecurity is at alarming rate, daylight robbery, Boko Haram, maiming, rape, gangsterism and what have you are the order of the day and the various security agencies are always cut napping.

We do not have natural disaster in this country BUT Human disaster because we now kill ourselves with impunity due to lawless of the few.

Aside from the foregoing, most state governments engage in misplacement of priorities and frivolities rather that give the people dividend of democracy.

It appears the systems have collapsed and if the centre can no longer hold, things will fall apart. The Federal Government should as a matter of utmost urgency brace up and nip all these short comings in the bud so that Nigeria can truly be the giant of Africa as it was some time ago.

At a time like this, the Federal Government should develop National Development Strategies that Work. Yours truly could be of assistance in this regard. The said strategies will develop Workable Policies that would address some of the underlisted: Poverty Reduction, Economic Development, Industry and Business Development, Agricultural Improvement, Infrastructural Development, Employment Creation, Sustainable Development, Water and Sanitation, Rural Development, Corporate Governance, Effective Education and Training, Gender Development, Social Justice and Inclusion, Social Protection, Housing and Shelter, as well as Preventive Health Care amongst others.

The aforementioned strategy development would be in Steps (Step 1 to 5).

It should be noted that we have the population that could be used to make things work unfortunately we lack leadership that can plan strategically and ensure implementation to the letter.

It is possible to make this country great and be the Giant of the World provided all hands could be on deck. Am of the believe that one day Nigeria shall be great.

It is well!

Long Live the Federal Republic of Nigeria!!

MUIDEEN ADEBAYO IBRAHIM

Is the Managing Consultant/CEO,

LIBRA CONSULTING and based in Lagos.

[email protected]

08037221517 SMS only