How oil destroyed Nigerian economy – Ciroma

Mallam Adamu Ciroma: The truth is that the economy is a complex matter. It grows and it could shrink depending on circumstances. The long and short of it is that since independence, some good things have happened and there are areas where expectations have not been met. If you are going to make comments on […]

Mallam Adamu Ciroma: The truth is that the economy is a complex matter. It grows and it could shrink depending on circumstances. The long and short of it is that since independence, some good things have happened and there are areas where expectations have not been met. If you are going to make comments on the economy, you must accept that not everything has been rosy. You must have balanced judgment about the development in the economy. In 1960, at independence, this country was still relying on agriculture as the basis for its operation. We had cocoa in the West, palm oil in the East and groundnuts, hides and skins and other agricultural products from the North. At that time, most Nigerians did not consider the oil sector as something which was going to change a lot of the components of the economy. At independence and some years after-wards, the management of the economy was still based on planning. The 5-year Development Plan was the practice worldwide at that time.

Nigeria had a development plan. In fact, we had development plans in the sixties and part of the seventies. At that time, you could see the direction of development in the economy because the development plan indicated where investments are going to take place and where you expect growth to take place. And so, it was easier at that time to see what you expected to do and the shortfall from what you have achieved. But by 1975 or thereabouts, the practice of development planning gave way to the practice of the concept of rolling plan, three year plan, et cetera. Then the concept of public investment gave way to private investment. So, it became more difficult to judge what has been achieved year by year or at the end of every five years. It became obvious that oil had assumed a very important place in the economy, not by percentage contribution to the GDP but by the inflow of foreign exchange. By the mid-seventies, about 80 percent of all our income in foreign exchange came from oil. Agriculture alone was contributing between 40 and 50 percent of the GDP. And naturally, because the agricultural contribution had dwindled and because we had so much foreign exchange, we started importing more food items.

The result was that agriculture went down. The revenue from cocoa, palm oil, groundnuts progressively went down while the foreign exchange from oil revenue progressively went up. That is the real problem of the Nigerian economy. Oil practically destroyed it, in a manner of speaking. The problems that have arisen have not been handled in the way that it should, either to minimise the problem or eliminate it.

Some people believe that poverty has grown. That is what World Bank and IMF reports indicate. As far as the citizen is concerned, the economy has never been in a worse situation because his income has gone down. The economic situation has led to militancy in the Niger-Delta and hostage taking in some parts of the country. The governance of the economy has been very poor at all levels. Governance has been characterized by the mismanagement of the financial system and misdirection of expenditure. The areas where people needed support like health, agriculture and education have suffered from poor investment. So, the people who live under stress in terms of poverty, increased from what used to be 50 percent to about 70 percent.

WT: Do you think that abandoning the development plan is responsible for our economic problems?

Ciroma: Not exactly. Planning helped us to know the direction of development which has been outlined by government and you can judge performance according to achievements in the development planning. Now we don’t have that. Sometimes it is even difficult to judge whether a government has succeeded or failed. But my own view is that planning became unfashionable at one point in time with economists but there is need for development planning so that people will know what they are going into.

It may not be that everything in the plan will be financed by government but government should give a direction even to the private sector on where development should take place.

WT: Some analysts believe we should hold the elite responsible for the economic problems of Nigeria just as the elite in Malaysia, Singapore and Taiwan have been commended for the development of their countries. Do you share that opinion?

Ciroma: I believe that the elite are largely responsible but we Nigerians must share in the blame. But you must realise that leadership is a very important factor in the direction of development. When you talk about the elite, you are talking about the leadership factor and I regret to say that they have not performed as their Indian or Malaysian counterparts have. The civil service has not performed as we expected. The political elite have performed very poorly.

WT: As an elder statesman, what advice do you have for the government on the way forward for the economy?

Ciroma: The point I have made is that there is no difference between the parties in power across the country. They are all doing the same thing. In a way, the Nigerian political leadership is now one in the way they conduct public affairs. The strange thing about leadership is that if you are able to get one person who is committed, who believes in what he is doing and ensures that those who are in administration with him do as he does, you will find that the situation will change drastically. I think this is the key and secret for example to the development in Malaysia where political and civil service leadership travelled doggedly and honestly in the same direction. And it has produced fantastic results. The same can be said of China and India.

We must be sorry for ourselves in Nigeria for the way we have been unable to cope with events in the right way. One area that needs urgent government attention is the area of youth unemployment. How can you keep educating and graduating thousands of youths annually without creating job opportunities for them to get employed? It is criminal and dishonest for us to be asking the youths to be self-reliant and all that talk. Even in America, job creation is top government policy. Didn’t you hear Obama saying that he will create thousands of jobs for Americans? It is high time government begins to implement policies that will create employment for our youths.