Thursday, June 3, 2010

Nigeria without oil: Akwa Ibom example

Ken Ugbechie

What if crude oil suddenly disappears from Nigeria's subsoil? Do our leaders ever stop to reflect on the possibility of a Nigeria without crude oil and all the cheap, and more often stolen, money that comes with it? Sometimes, I shudder at the miracle of crude oil.
But I also judder at the consequence of the inevitability of the oil wells drying up some day. Experts have predicted it is possible for Nigeria to cease being a global crude oil heavyweight in the next 50 years when the last drop of crude from some of its oil wells would have been expressed. If you doubt that crude oil would disappear, ask the Texas oil billionaires of yesteryears why they do not dominate the Forbes billionaires' list today. Ask them what happened to their once flourishing oil wells. Some dried up. That's the truth. And it can happen here, in Nigeria.

This is the sense in which we should all be worried. And the right attitude is not to brood over this inevitability. The right attitude is to be strategic in thinking and inventive in leadership. Last week in this column, I analysed the scourge of crude oil in the Niger Delta and how oil 'supermajor' Shell has since 1958 made a huge meal of the resource while the natives grind the poverty mill. I submitted that what some of the oil companies do in Nigeria, they cannot even as much as contemplate in other countries where the governments are both responsible and responsive. I blamed successive Nigerian governments for the primitive exploitation of the Niger Delta region by the oil majors.

Many rejoinders to that treatise also concur that the inertia on the part of Nigerian governments from enforcing the rules for the oil companies was the greatest incentive for the wild plunder of the oil-rich communities.

But there is good news. Akwa Ibom State, a major contributor to the nation's crude oil output, is already thinking of a Nigeria without crude oil. The state government is investing in yet another oil business; this time oil palm business. As part of the state's divestment in agriculture, it has begun the process of etching its name on the global map as the largest producer and exporter of palm oil out of Africa.

Palm oil production is not a novelty in the state and in fact in Nigeria. In Akwa Ibom and in all the South South and South East states, palm oil was once the mainstay of the regional economies. At that time, the old Bendel State (Mid West region) had lush verdant of oil palm and rubber plantations. In the South West, cocoa kept the economy afloat while the sky-high groundnut pyramids of the North ensured that the economy of that region kept its nose in the sky. Nigeria had a healthy economy, an impressive per capita income and life was really good both for the people and the government. It is on record that one of Nigeria's Ivy Leagues, the University of Nigeria, Nsukka, was built largely with proceeds from palm oil.

In Akwa Ibom, the governor, Godswill Akpabio, says he wants to return the state to its glorious days as a major producer and exporter of palm oil. The government has held a stakeholders' meeting which brought all the subsistence palm oil producers in the state together. It has entered into a partnership with a Malaysian company for that purpose. It has also reportedly sealed agreements with other companies from Vietnam, Israel and the United Kingdom for the purpose of pushing agricultural produce in the state from subsistence threshold to commercial production.

Incidentally, it was Malaysia that copied the Nigerian template for oil palm production. Before crude oil was discovered, Nigeria was the world's largest producer of palm oil. In the early 1960s, the Asian country came to Nigeria to get her first biggest batch of seedlings. Mind you, there are two species of palm trees : Elaeis guineensis found in Nigeria and West Africa and Elaies oleifera which nativity is Central and South America. The Nigerian (West African) variant is the better. It is more prolific and more resistant to diseases.

Today, the same Malaysia is the world's largest producer of palm oil followed closely by Indonesia. Both countries account for 85 percent of global palm oil production. Last year alone, Malaysia earned about $15 billion in export from palm oil to over 150 countries, including Nigeria.

Should Akwa Ibom push through this ambitious project, it would effectively unclasp itself from over-dependence on federal allocations from crude oil receipts. It would create jobs, mitigate capital flight and earn good foreign exchange. Significantly, entrepreneurship in palm oil production is not as capital intensive as investment in oil and gas exploration. It does not require as much technical skill either. This makes it attractive. Plus, nothing is a waste any more. From the palm tree trunk to the kernel, every part of the palm is useful either as consumable, in the making of toiletries, processed food and as a source of biofuel. In the Niger Delta, particularly in Delta State, the Banga soup is a mildly odoriferous yummy delicacy which attracts special price especially when served with bush meat or fresh fish.

What Akwa Ibom is doing is to retrace its step, to provide a reliable and sustainable alternative to crude oil, and to get its youths gainfully engaged. For a state already besotted with thousands of small scale palm oil producers, aggregating these efforts and injecting technology and money through foreign direct investments in the sector would leverage the state into the top bracket in global palm oil throughput. The Niger Delta states should copy the Akwa Ibom template if only to get the usually restive youths busy.

The good thing is that Nigeria is by far Africa's largest repository of oil palm plantation. What remains is harnessing them into consumable and exportable produce. Who knows, it might just be the nation's lifeline in the twilight years of crude oil production… which is just decades away if scientists are to be believed.

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