Remarks at the Dentiscope Annual Conference, University College Hospital, Ibadan



Allow me to make this a speech ,and not a Powerpoint presentation as I seldom have an opportunity to speak to in public education institutions, and this is one I hold in very high regard. I thank Dentiscope Magazine for counting me worthy to make this presentation at the Annual Conference, most importantly at Nigeria’s oldest University — Greatest UI.

Greatesssst UI! Greatesttttt……
Wait, have I said it properly?

If I did not, pardon me. I did not have the luxury to attend your University. As a Loyola College boy, I was intent on seeking adventure as far away from home as possible, therefore putting other institutions in my order of preference.

The history of independent Nigeria cannot be fully written without this acknowledging this institution, the University of Ibadan. This why I am going to painstakingly make my argument that the route to diversifying Nigeria’s economy is actually here, on this floor, within this perimeter and several other education institutions that have since come after UI. The founders of independent Nigeria were locked into a race to leap us forward as a nation; they were not merely left with just a country to run…the colonial masters bequeathed us this institution, understanding that knowledge precedes understanding the right to social and economic freedom. It is not a mistake that those who actually fought for Independence were the early intellectuals who walked through the fine fire of the education. So when they assumed leadership in Nigeria, the first battle among the regions — was to create public institutions. University of Ibadan was a space for intellectuals across all parts of Nigeria, but our Fathers rightly felt this “this alone will not do.”

Akintola founded the Obafemi Awolowo during his Premiership in 1962, Ahamdu Bello in 1962, all preceded by the University of Nigeria in 1960. Each region understood that the rungs of industry and human civilization only happen because societies invest in education and the dynamic spirit of their people. However, there was an incentive to achieve this, because under the federalism structure being run, the chase was on. No one wanted to be left behind.

You see, this happened not only with education; each region was after its own sustenance, like the fabled many children of an absent father, once the colonial masters left, it was each to his own. And that is how regions dug deep into farming, commerce, and unique enterprise.

Let me start with a caveat; when we say “diversification,” we have to put this into three categories — the diversification of exports, the diversification of public finances and the diversification of the Nigerian economy. Let me state that the Nigerian economy is already properly diversified, as oil has a share less than 15% of the value of Nigeria’s output. The question that the other two indicators reflect is a situation where oil is either the dominant factor or massively influences the pulse of public spending and revenue.

Like I alluded to earlier, we had thriving regions, who found their opportunities in expanding regional, international markets in cocoa, palm oil, rubber and groundnut. On this revenue alone, we built television stations, founded a University, a stadium, even a 25-storey building. Just imagine what it would cost to build a 25-storey building in these times, when even, 52 years after the commissioning that building, there are actually less than 5 buildings higher than Cocoa House in Nigeria.

Let me share an aspect of BudgIT’s research in progress –one which delves into a deeper review of the current recession that Nigeria finds herself in –

Starting out in 1960, with approximately 45million1 people and a largely agrarian economy, Nigeria has evolved over the last 56 years into a relatively service-driven economy enduring economic recession, civil war, political unrest and social challenges along the way. In 1960, 63.5%2 of economic activities were dominated by crop production, animal husbandry, forestry and fishing, while manufacturing was only a fraction of economic activities at 5%2. Domestic construction and transportation activities were the primary consumer of products coming out of the mining and solid mineral sector dominated by the quarrying activities. The oil and gas industry, which many see as the driver of economic activities today, was just a tiny fraction of the economy in 1960 at 0.3%2.

The relevance of the manufacturing sector began to dictate the pace and drive government’s policies through the 60s but after that, the United States, Canada, Japan, Australia, New Zealand and most Western European countries faced substantial petroleum shortages, leading to massive investment in Crude oil exploration and production activities.

By 1970, the oil and gas sector had overtaken the manufacturing sector, to become the mainstay of the economy, due to economic relevance and value of output, as annual production touched 395.8million barrels.3

The oil and gas sector finally overtook the agricultural sector in 1979. The sector’s contribution to GDP was 25.5%2. In contrast, at 22%2 of GDP, the agricultural sector, which remains the biggest employer of labour till date lost traction.

The agricultural sector’s contribution to GDP dropped further to 11.8%2 by 1981 before picking up thereafter.

This upswing was caused by price corrections in the crude oil market in the 1980’s, with oil and gas industry’s contribution to GDP falling below 7%.2

Agriculture, however, returned to prominence, as the currency crisis alongside other risk factors debased Nigeria’s manufacturing strength and its ability to obtain the required raw materials and spare parts critical to its expansion drive.

Today, the oil and gas sector and the “ailing” manufacturing sector’s contribution to GDP is approximately 6.36%2 and 10%2 respectively, while the agricultural sector which was the dominant sector in the 1960s contributes 23.11%2 to the sum total of economic activities in Africa’s largest economy.

The pertinent questions here remain: How come did we end up a country that has 96% of her exports tied to oil? How did we, in the space of 50 years, build a nation where every mild or severe swing in commodity prices throws our growth and fiscal balance out of sync, putting the country into further misery?

Why has Nigeria earned over 1trillion dollars in oil revenue since 1973 yet still has 80million poor people? Right from when Nigeria found oil, our share of non-oil exports continue to dwindle, and our public finances flop about in boom-and-bust cycles, simply because we have settled for the title “oil-driven economy,” despite global market trends telling us loudly it is pure foolishness to remain so.

In fact, the few times Nigeria has sounded like she is ready for greatness in the last 45 years was only because external event boosted oil prices. In 1973, 1990, 2005, 2008 and 2013, there were growth booms, local, states and federal governments flush with cash, creating opportunities for the public sector to expand a rentier culture and bloat the civil service with ghost workers and cronies. However, I have some bad news. We are locked into a bust situation that we might never recover from. Nigeria might not get away with remaining a slave to oil because with the preponderance of shale technology in most industrialized economies and the swift pace of renewable technologies? Our oil lottery is running out. Fast.

A keener look into thriving economies shows that their foundations are built on people, not just on the size of their population, but turning them into assets. This is what we systematically destroyed. We did not turn our own citizen to assets, losing the opportunity to understand that the unit of diversification lies in optimizing human capital within societies that create opportunities to allow citizens thrive. The economies staying ahead and diversifying apace are the “Knowledge Economies,” so-called because they prioritize people over politics.

According to the World Bank, knowledge economies are built on the following: institutional structures that provide incentives for entrepreneurship and the use of knowledge, skilled labour availability and good education systems, ICT infrastructure and access, as well as a vibrant innovation landscape that includes academia, the private sector and civil society.

So going back to our prior definitions, diversification falls under: diversification of exports, diversification of the economy and diversification of public finances. Nigeria already has a diversified economy, of sorts. But why is she not operating at her highest potential? Simply because our country has failed, or is experiencing scant progress in the other two aspects of diversification — diversification of exports and diversification of public finances. Our finances basically come in one way — oil — and go out through the other — disbursements, bogus contracts, with a tiny amount of roads a megawatt or two, some sewing machines or keke napep to a few people here and there.

To what use are we putting our public finances?

With exports, why are we not achieving global standards of production, and innovations in product development and packaging? The answer lies in a lack of..knowledge.If you decline to use public funds to invest in education, research will not happen, and you will remain a country which grows products that are not attractive to diverse markets.

If you remain focused on oil, and channel all resources into the oil industry, you will not have the type of engineers who achieved the New Silk Road between Britain and China. Yesterday 30 containers filled with vitamins, whisky and soft drinks left on a train from Essex, and will land in Eastern China after 18 days, effectively diversifying both countries’ export portfolio further. My point? Despite its facets, the only way to achieve full diversification is via accelerating the development of a knowledge-based economy.

Our basic unit of diversification is you, making you a skilled asset to Nigeria and ensuring that the environment is built to allow you thrive. The process should begin here. This should be our fountain of ideas, spring of inventions and space of innovation. This is where you should plug in, finally creating a fulcrum between the town and gown. The British built our first rail, the Chinese is building the next batch. The difference is a skilled economy. The question is what are we going to sell to the world? What can we sell if we can’t explore our value chains based on technology and if the education which is the bedrock of such is so dysfunctional? A developing country that spends ten times on a parliament than a University is not yet ready.

With our lip service to education and technology, this our oft-repeated diversification will be slow and mired in gradualism until we do what is necessary — invest in YOU as well as spaces and enviroment that allow you thrive.

The clock is ticking, no one is waiting…



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