Wednesday, February 1, 2012

Oil discovery hinders Africa’s growth

Oil Discovery Hinders Africa’s Growth.
The Guest Speaker, at a National Lecture: “Nigeria in Transformation,” Mr. Richard Dowden, has described the discovery of oil in Nigeria as a “curse” rather as a blessing a to Nigeria.
Dowden, who is currently the Director of Africa Royal Society (ARS), identified “unfairness in the system of resource allocation” as reason for fierce competition.

He also listed corruption, poor reputation and flight of human capital as other factors that have worked against the country’s economic prosperity.

“But the fifth and main problem that Nigeria faces is politics, often, Nigeria and much of Africa has followed the wrong economic policies for political reasons. Adding “this has accounted for the over one hundred million Nigerians living in poverty- which is a quarter of the total poverty in sub Sahara Africa.”
According to him, “after oil and corruption which are closely linked, I would say that Nigeria’s reputation in the past still puts off investors and tourists”.

“What I see here is that perceived or real unfairness in the system of resource allocation has led to fierce competition for success- or just survival. I would say that the competitive, creative spirit this creates is far more powerful than in any other country in the world,” he said.
Dowden noted that Nigeria at Independence had a trade surplus with the UK and substantial reserve, saying that, “in the 1970 oil was only 60 percent of export. By 1982 it was 99 percent of export and almost the same proportion of fiscal revenue. Almost all other exports like Cocoa, rubber, cotton and ground nuts have been wiped out.”

He noted that between 1970 and 2001 per capita income fell from $264 to $256 in constant Dollar rate. And By 2000 Nigeria became an oil rich deeply indebted country and experience of the vast majority of Nigerians became poorer and concluded that oil is a curse to the country.”

While comparing Nigeria with other countries like Indonesia who shared similar socio economic and political experience, Dowden described as unacceptable, a situation where Nigerian politicians are the highest paid in the world with $1Million Dollars as salary with another $1Million in expenses while the country accounts for over 10 percent of Maternal and child mortality rate as well as 10 percent of the world Children who are out of school.
He warned that if the up coming generation of Nigerians are unable to fulfill their potential, the country stand the risks of experiencing mass revolt.

He therefore called on government to build strong institutions that would ensure consistency and continuity in governance.

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