President Barack Obama’s statement last week on the US and oil import from Africa is not new to many. What is rather new is the fact that such an emphatic pronouncement came from the president himself; foreclosing any assumption by any body that the current global trend on oil and gas consumption is not yet a serious affair. For such a statement to have been made while on a mission to seek better life for Africans implied that a more serious review on our international trade options must begin immediately. The implication of this revelation is not that the US may not need our oil anymore, but that the entire world may not need our oil in no distant time. This should be where our thought and strategy should be. As an outspoken leader, Obama did not want to use diplomacy to deceive people, otherwise he would have told Africans sweet things that do not improve their situation. He wanted to ask those countries like Nigeria that have been hiding under the free-reign provided by the oil and gas era to begin to look for a way out of the imminent alley-way. In fact, he wanted Africans to look deeper into backward integration as a serious growth option.
Insiders in the oil and gas sector had since expressed fears over our dependence on oil revenue because they have been privy to the global trends in energy consumption and production. A situation where new energy sources have emerged while many oil wells have been founded across the globe tends to further shrink the market. The arrival of bio-technology has offered the developed economies the advantage of modifying their equipment to be compliant with new energy discoveries and when this stabilizes, the pre-eminence of oil will be one paradise forgotten by many. Apart from this, the issue of proximity and risks make Africa a lesser choice for all these. If the large deposits of oil and gas now discovered around those small islands in the South and North America can export oil, why must US come to Africa for a purchase even as the spate of high sea pirating is taking its toll on ocean and sea-goers. Any way the economics of oil and gas marketing is viewed in the present dispensation, African stands a very big disadvantage.
A friend in the oil and gas sector once told me that Nigeria stands a chance of becoming poor very soon because the anticipated income from its primary export products(oil and gas) will begin to dwindle when all the new discoveries begin to be explored. He told me that gas deposits are seriously being explored by various countries in quantities that diminish what Nigeria already has. He also told me that very soon , over 75 per cent of our oil and gas produce must be consumed here as the foreign markets will need little or nothing. This becomes scaring based on the fact that we have a very weak currency even as the naira will become far weaker when its oil revenue dwindles. In fact, the signal of a dwindling oil revenue points to a corresponding crash in so many things , including our external reserve. A situation where Tanzania will soon become a major gas producer means that such huge investments in that industry may become wasted if sales volumes crash, especially for a country that imports technology and has taken all sorts of loan to invest in it.
What Obama has indirectly told Nigerians and Africans at large, is to begin to cut down their spending on oil and gas infrastructure and begin to make massive investments in the real manufacturing centres such as iron and steel as well as agro-allied institutions that can offer relief to our ever growing population. The cost of building the NLNG at Bonny can build several petrochemical plants and mining industries or food processing firms. Apart from exporting these to the other African countries, the 160 million population in Nigeria is a huge market of its own. The only problem why African countries cannot be economically independent even when they have built several industries is because they still do not have a single indigenous industry that produces machineries and tools. What this implies is that if the continent does not develop its own tools, instruments and machines companies made from materials in Africa, it will be difficult for it to make any tangible importation to service them because their access to funds will be highly reduced.
Obama’s revelation could be a stitch in time , but the fact remains that it could be seen as a fore-runner to the controversial expose from a segment of the same country on the Failed State Syndrome. Many Nigerians can now see that this statement is coming close to 2015 and all other indicators could be identifiable or approximated to have the capacity of really getting blown in the next two years. If US does not need Nigeria’s oil and gas and we rely strongly on an India market whose currency is as lowly rated as our Naira, there is problem for us. What Obama did was to give out a message specifically meant for Nigeria on another land knowing that every African will understand whose message it is. Obama did not visit Nigeria but he diplomatically left a message meant for Nigeria within the African soil and in a country where Nigeria has a strong presence, politically, economically and socially.
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