Nigeria: A Victim Of Resource Curse — @Lanre_Olagunju

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The reality that a country’s natural resources can constitute an economic curse rather than a means for economic prosperity has found its full expression in Nigeria. It’s absolutely amazing to see African countries so rich in natural resources struggle amidst plenty. I personally consider it one of the staggering wonders of the world. How can countries with enormous natural resources perpetually be unable to harness same available wealth to boost their economy?

It’s sad that Nigeria is a leading victim of such an economic curse. It was General Yakubu Gowon, who said in 1973, during his reign as a military president that “Money is not our problem but how to spend it”. This sentence probably must have sounded quite reckless and thoughtless when Gowon first said it in the 70s, but the realities are now clear for all and sundry.

Though it’s actually counter intuitive, yet, it’s evidently clear that being blessed is not enough. And that the availability of natural and human resources might not necessarily translate to tangible economic growth and prosperity. This lends credence to the economic presumption that says that countries whose economies are fully dominated by resource extraction eventually become repressive, corrupt and badly managed.

Corruption at its most chronic height has been responsible for the resource course Nigeria suffers. Here, government and the people are at a constant loggerhead due to the fact that government has decided to perpetually turn a blind eye to the reality that the large amount of resources available in the country isn’t meant to fuel the luxurious lifestyle of those in power and their cronies. Between 1960 when Nigeria got its independence and now, about $380 billion of government money has been stolen—and honestly that’s about six times what the U.S. pumped into reconstructing the whole of Western Europe after World War II. In the oil sector, between 2009 and 2011 alone, about 136 million barrels of crude oil worth $11?billion was siphoned.

Correcting this wrong notion is the surest way to bail Nigeria out of poverty and the penury that over 112 million poor Nigerians daily languish in. To these poverty stricken ones in Nigeria, the abundant natural resources serves as a curse, since it doesn’t reflect in their standard of living.

In economies that are not dependent on natural resources, government takes taxation issues seriously, since that’s the source of revenue through which it provides essential amenities for its citizens. You’d also realize that in economies such as this, politicians majorly depend on the public and goodwill of their supporters to finance election. This relationship helps to establish a symbiotic engagement between government and the people.

But in economies where the bulk of revenue comes from natural resources, the government doesn’t see any reason why it should value the people or even listen to them. They feel that since they financed the elections from their own purse and through the help of their godfathers, they wonder why the people should count, let alone their views. Therefore their primary duty after winning an election is to recoup the spent funds and that of their political godfathers first. As a result of this, citizens are poorly served by the governed.

When a country is overly dependent on natural resources, it insulates leaders from public pressure and accountability. Out of the world’s 20 top oil producing economies, Freedom House, a U.S.based NGO that conducts research and advocacy on democracy, political freedom, and human rights affirms that only five are truly free. Many African nations rich with natural resources are victims of this phenomenon basically because they make poor use of their wealth.

In the year 2010, Equatorial Guinea ranked the highest as the African nation with the highest average per capita income with about $35,000, yet, 75% of the population lived on less than $700 a year, which is just about two dollars per day.  The ability of Equatorial Guinea to translate its wealth to prosperity for its citizens was hindered by corruption which undermines economic growth and provokes conflict. A good example of a country whose wealth invokes crises is Sudan, whose oil revenue provides more than 18% of the nation’s gross domestic product.

Instead of investing the returns made from natural resource revenues on infrastructure and education which would in turn advance growth and development, African leaders would rather connive with companies handling the resources so as to siphon money meant for the nation into private purse.

Resource curse can be avoided if corruption and mismanagement will be replaced with good governance and transparency. It’s also crucial to note that dependence on a particular resource blinds the entire nation from seeing other brilliant openings for wealth and prosperity.

It’s not that wealth and abundance from natural resources automatically makes a nation poor. It’s not exactly so. Gross mismanagement and greed is the major cause of Africa’s setbacks. After all, countries like Canada and Norway produce oil and yet they are well-governed. Canada’s government is one of the least corrupt governments in the world. One of the top ten exporters of crude oil in the world is Norway, yet, it maintains its stature as a perennial leader of the United Nations Human Development Index. In fact, North America produces more oil than Africa yet the continent enjoys an appreciable level of good governance.

I am @Lanre_Olagunju on Twitter.

 The views expressed above are solely that of the writer and not necessarily that of Omojuwa.com or its associates.

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