A former deputy governor of the Central Bank of Nigeria (CBN), Kingsley Moghalu, has said that oil has been a curse for Nigeria.
He said this in reaction to the discovery of oil in the northern part of the country.
On Tuesday, President Muhammadu Buhari ended the Kolmani Integrated Development Project at Bauchi, saying the country attracted a $3 billion investment in fossil energy from the project at a time when the oil and gas sector was becoming less attractive.
“Therefore, it is to the credit of this administration that at a time when there is almost zero appetite for investing in fossil energy, coupled with the challenges of location, we are able to attract investments in excess of $3 billion for this project.” said Mr. Buhari said.
The Kolmani Integrated Development Project is a fully integrated on-site development project comprising upstream production, oil refining, power generation and fertilizers.
The Kolmani River field has huge commercial hydrocarbon deposits, which the president says are “over 1 billion barrels of oil reserves and 500 billion cubic feet of gas.”
But Moghalu, who ran for Nigeria’s president in 2019 under the Young Progressive Party (YPP), believes the country hasn’t gained anything significant from being an oil-producing nation.
Nigeria is one of the main producers of crude oil in Africa. Most of the foreign exchange (FX) earnings come from the sale of the commodity. However, oil theft and corruption have subjected its citizens to abject poverty, and the government resorts to borrowing to finance its budgets.
“I fully agree with those who say that oil has been a curse for Nigeria. Many of them question the ultimate value of the Kolmani oil find in northern Nigeria.
“But I’m also practical enough to know three things. First, some countries like Saudi Arabia, the Gulf States and Norway were smart enough to use oil to develop their economies, but they diversified into other means of wealth creation and also accumulated savings (reserves/Sovereign wealth funds). wealth) for the difficult days they have had. it served them well.
“Secondly, the real secret of the wealth of nations is NOT in natural resources. It lies in economic complexity: the ability to prioritize technological innovation and use it to make complex products that have added value and are produced competitively and then exported to dominate the global trading system. Singapore, South Korea, Japan, Switzerland and many other of the world’s richest countries have NOTHING of value under their soil, but have used this principle to create wealth for their citizens. That’s why they’re rich, but we in Nigeria and most other African countries, with our so-called blessing of natural resources, they find themselves in a poverty trap.
“Indeed, we have the resource curse. 70% of the world’s strategic minerals are found in Africa, but the continent’s share of world trade is only 3% in 2022.
“The third thing that I am practical enough to know is that as Nigeria is currently run and configured, the dominant mindset of its political leadership is still fixed on natural resources and resource rents. They just don’t share or care about the secret of nations’ wealth.
“Their minds have not yet evolved to that knowledge or, more accurately, the political will to de-emphasize natural resource thinking and switch to real wealth creation,” the respected economist said in a series of tweets via his verified Twitter account, @Moghalu Kingsley.