Nigeria at
independence participated in external trade with agricultural output
constituting the lion share prior to the surge in oil
export in 1970s. However, the Nigeria’s trade composition drastically
changed with the discovery of oil in 1956 with production commencing in
1958 which in recent times has seen oil exports reach over
two million barrels per day. With the emergence of oil export, agriculture was
totally neglected. Oil constituted about 90 per cent of the
country’s export revenue leading to a reliance on the petro-dollar
economy and a craze for importing luxury goods.
Despite the
fact that Nigeria was had the opportunity of using the newly discovered oil
resources to transform the economy, it continued committing the
same mistake made with agricultural raw material export.
This time around oil was exported in its crude nature which also
attracted low value. This perpetual blunder is responsible
for the country’s sluggish capital accumulation which
is required to manufacture machinery necessary for mass production of
goods and services.
Now the
glory days of oil seems to be receding and the general
outcry is on how to go back to the so-called glorious days
of export of agricultural products now relegated to less than 10 per
cent of the export revenue, and to include solid minerals which, hitherto
accounted for only about one per cent of the export revenue. Many
observers have wrongly linked the country’s
economic stagnation to the neglect of agriculture. This gave
rise to the misconceived slogan that oil was a curse to the
Nigerian economy.
Therefore, many
believe that the blessing for the country was export
diversification.
The
questions that arise here are: where shall the new dream of
increasing solid mineral and agricultural export take Nigeria to which the
crude oil export had failed? Why is the Nigerian
economy not developed despite the decades of export revenues? And
what corrective measures shall we take to achieve maximum value for our
exports, minimum cost for our imports, domestic employment through the export,
and capital accumulation for economic prosperity? The fact is that
Nigeria, both before and after independence, has been exporting invaluable but
bulky primary products. These exports fetched insignificant foreign
exchange compared to finished industrial products.
In addition,
the international specialisation that circumstantially made Nigeria to exploit
and export its raw materials crippled the domestic
industries to the extent that the country had no option but to
depend on imports of precious industrial goods. As a result of
this, the hard-earned foreign exchange was invariably being eroded.
This
dangerous situation further incapacitated the domestic industries
and, therefore, denied the teeming youth access to gainful
employment. More so the youth were made to rely
on the public sector for employment thereby promoting the fiscal
imbalance against capital expenditure. This led to dependence on
foreign loan irrespective of the consequences of the loan
capital, the least of which required the country to devalue its currency
and liberalise trade.
Although
modern economic policies are based on trade openness, the same
proponents of free trade used to take restrictive measures against any
foreseeable danger. It is an undeniable fact that no
country can live in isolation, but the developed countries, well advanced in
technology, have already positioned themselves in industrial and service
sectors before calling for competitive trade. The underdeveloped countries
including Nigeria are thus relegated to the inferior area
of specialisation – raw material export. Nigeria should not misinterpret
trade interdependence with trade dependency.
For this
reasons, neither the promotion of solid mineral export nor the
revival of agricultural export or the increase in oil price in the world
market can positively change the economic situation of the
country. In fact, what stagnates the country’s economy
from the slave trade era to date is simply the unequal exchange
relationship that existed at the international level.
From the
foregoing, Nigeria needs to improve the value
of its exports. For example, we should not export agricultural output
such as rubber and cotton, but process these raw materials for our consumption
and export the surplus. Likewise, we should not export steel but should produce
roofing sheets, machines, nails, and so on. Furthermore, we should
stop exporting our crude oil but rather should process it to export
refined petrol and its by-products.
The cause of
our current economic doldrums is in the export of primary
product. This is compounded by our craze to import the processed raw
materials in form of finished goods from
the developed countries at higher value. This should be
corrected by means of domestic production for self-sufficiency in consumption
and for export of surplus.
By reversing
the raw material export in favour of export of finished products, and by
curtailing our unnecessary import culture and becoming
self-sufficient in at least the basic necessities, Nigeria’s economy
would advance. But the campaign for export diversification in favour of
another type of unprocessed or semi-processed raw
material export such as the solid mineral and agriculture is a recipe
for economic disaster. (Guardian)
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