By Izienlen Agbon
Nigeria is a consuming nation. We are not a producing nation. We export raw materials produced largely by foreign firms and import processed goods to meet most of our daily needs. This has been the foundation of our economy since the Europeans landed on our shores. Speaking at the opening ceremony of FESTAC on January 15, 1977, General Olusegun Obasanjo stated “When we made our first contact with the merchant adventurers from Western Europe, most of our shores became trading posts where primary products were exchanged for processed goods. I would like to suggest that the modifications and complications of modern economic organization and exchange apart, our uneven relationship with Europe and now including North America remain basically unchanged. We continue to be trading posts which supply primary products in exchange for processed goods. The trading posts are run and maintained by our citizens. These can be grouped into four (a) intellectual (b) commercial (c) bureaucratic (d) Technical. The activities of these agents constitutes impediment to Black African development.”
Today, we produce crude oil and import petroleum products. We remain a neocolonial trading post for foreign capital. The fundamental economic, political and social relations of Nigeria are relations of underdevelopment designed to reproduce the nation on an expanded scale as a neocolonial nation. These power relations are managed by a regressive anti-development native ruling class whose primal function is the looting of the public treasury for private benefits. It is time we change these social relations and move Nigeria from consumption to production, understood from a grassroots perspective. The strategies, policies and programs governing this movement must be directed at meeting the sustainable development interests of the grassroots and the masses of our people.
Moving from consumption to production means different things to different people. The Nigerian ruling class is unproductive, corrupt and engages in the conspicuous consumption of looted national wealth. From the point of view of the Nigerian ruling class and Foreign Capital, moving from consumption to production means more surplus value, more profits, more cheap raw materials, more cheap labour, more alienating work, more rent seeking opportunities and better access to loot public funds. The ruling class would like to see the grassroots consume less and produce more. It does not matter that 133 million of us live in multi-dimensional poverty. On the other hand, the perspective of the Nigerian grassroots is different. The Nigerian grassroots consists of waged and unwaged workers, farmers, women, youths, students, small and medium enterprises owners and the unemployed. From the point of view of the grassroots, moving from consumption to production means more wealth, less alienating work, more disposable time, a better life for ourselves and our children, and the organization of Nigerian society around a multiplicity of self-determined activities. It means the implementation of grassroots friendly policies, strategies and programs aimed at ensuring balanced integrated sustainable development in major economic sectors. Let us examine what moving from consumption to production means in the industrial, agricultural, and oil and gas sectors.
From a grassroots perspective, moving from consumption to production in the industrial sector means we implement a planned and balanced rapid diversification and industrialization of the national economy. We produce most of the raw materials that we use. We process all our raw materials in our factories and add value to our products before export. We stop the export of primary products and the import of foreign processed goods. We produce most of the processed goods we need locally. We produce our national means of production and the machinery necessary for the processing of our agricultural produce. We own, dominate and control every stage of the national industrial value chain.
The industrial value chain consists of inbound logistics (raw materials supply, inventories), operation, outbound logistics (packaging, sorting, shipping, distribution), markets and sales (advertising, pricing) and after sales services (installation, repairs, upgrades, customer services). Each stage of this industrial value chain must take place within Nigeria. The Nigerian state owns the means of production in key industries such as Steel. The strategy for a diversified planned and balanced rapid industrial growth links the industrial sector to the agricultural sector with the production of modern machinery/tools for mass agricultural production and the industrial processing of agricultural products for domestic sales and export. This strategy promotes balanced integrated growth between the industrial and agricultural sectors.
Nigerian public capital invests in the leading sectors of the economy (steel, oil & gas, solid minerals and ICT) in order to constrain the dominance of Foreign capital. Nigerian private capital is small compared to Foreign capital. Given an unregulated free market, Foreign capital will crowd out Nigerian private capital in the leading sectors of the economy. The State supports the growth of small and medium enterprises with favourable local content policies and regulates the market to discourage oligopolies and monopolies. Cheap available power is encouraged. The privatization of public owned assets and enterprises is stopped and the public assets are commercialized in joint ventures under autonomous management. Finally, the Nigerian State respects all labour laws and honours all labour agreements.
From a grassroots perspective, moving from consumption to production in the agricultural sector means we grow what we eat and eat what we grow. We process all our agricultural products and add value to them before export. We implement grassroots friendly policies, strategies and programs. The strategy for agricultural development is centred on the mechanization of agricultural production and the processing of agricultural products. This strategy is based on increasing productivity by increasing output per acre and output per man hour for smallholder farmers through advanced crop science and the mechanization of agricultural production. Agricultural collectives and cooperatives are organized to pursue medium and large scale agriculture on communal lands rather than the large scale privatization of communal lands and turning land owning small farmers into landless rural hourly waged workers. Large scale privatization of communal lands will lead to massive rural urban migration and very high rural urban unemployment. Agricultural export crops are processed in agriculture based rural industries and value added before export. We own, dominate and control every stage of the national agricultural value chain.
The agricultural value chain consists of inputs (land, seeds, water, fertilizers, labour, markets, pricing information), growing and production (harvesting, transportation), processing and packaging, storage and distribution, and wholesale /retail markets. Each stage of this agricultural value chain must take place within Nigeria. We implement grassroots friendly policies, strategies and programs in the sector. The agrarian policies prioritize the production of the means of subsistence and ensure self sufficiency in food and livestock production. They encourage backwards linkages and support industries that produce agricultural machinery, fertilizers and high yield seeds. They encourage forward linkages of agricultural products by developing industries and SME engaged in processing and adding value to agricultural products. They encourage and support agricultural cooperatives engaged in medium/large scale agricultural production and forest/water resources management. They support agricultural producers with quick access to loans, grants, modern farming / livestock techniques and urban markets.
From a grassroots perspective, moving from consumption to production in the oil and gas sector means we stop the importation of petroleum products and encourage the domestic refining of our crude oil to meet our domestic needs. We diversify our economy by producing and refining all our crude oil and exporting surplus petroleum products after meeting our national demand. Nigeria has proven oil reserves of 37.1 billion barrels and natural gas reserves of 5.85 trillion cu.ft. We own, dominate and control every stage of the national oil and gas value chain. Each stage of the oil and gas value chain must take place within Nigeria. The oil and gas value chain starts with the production of crude oil and natural gas. Most of production is done by foreign oil companies. There is a need to increase the production capabilities of NNPC ltd and other indigenous companies.
The natural gas is processed and sent through natural gas pipelines to power generation plants, commercial end users and industrial end users . The natural gas can also be mixed with natural gas liquid (NGL), fractionalized and exported as LNG and NGL. It can be used as petrochemical and refineries inputs or sold to consumers as propane. The crude oil is transported in crude oil pipelines to crude oil storage and from there it is transported by pipelines to refineries or export jetties for export. Refined products are either sold to consumers in the fuel market or used as petrochemical inputs. The crude oil value chain is truncated in Nigeria with oil theft, sabotage, and unproductive refineries (445000 bpd capacity) . Almost all the produced oil is exported. The domestic demand for petroleum products is met by importation. This is the epitome of national underdevelopment.
Moving from consumption to production in this sector, from a grassroots perspective, starts with the repair of our existing refineries, the construction of new ones (conventional and modular) and the local production of the petroleum products needed to meet our national demand. Temporary swap deals are only done with local Nigerian private owned refineries. The oil and gas development strategy is based on ensuring self sufficiency in petroleum products production. We protect all our pipelines and stop oil theft. We terminate the importation of petroleum products. We base the pricing of petroleum products on a production cost pricing model (as per other oil producing nations) rather than an import parity pricing model as demanded by the IMF. The use of a production cost pricing model eliminates the need for fuel subsidy and provides the affordable power and energy needed for the rapid industrialization of Nigeria. The production of natural gas is increased and flared natural gas is captured and utilized for the domestic market. More modular gas turbines and gas fired power plants are built. Energy efficiency is increased and self sufficiency in LPG and CNG production is ensured.
We need to move Nigeria from consumption to production understood from a grassroots perspective. The strategies, policies and programs governing this movement must be directed at meeting the sustainable development interests of the grassroots and the masses of our people. This is how we turn Nigeria into a manufacturing powerhouse and a food basket for Africa. The grassroots must get our PVC and vote wisely in the upcoming elections. After the election, we must fight for strategies, policies and programs that move consumption to production from our perspective. Nobody will fight for us. We have to fight for our own liberation. The future of own children and the sustainable development of our nation depend on it.
Dr. Izielen Agbon