NIgerias oil and gas sector is, and has been for many years, a glaring paradox. It is the elephant in the room that casts a shadow on all else that tries to enter. The reasons for this are well known. We are the sixth largest oil exporting nation in the world, and yet we import much of our petroleum products needs. We have been producing oil for over 50 years and yet our nation is plagued by abject poverty, unemployment and poor education while our per capita income remains one of the lowest in Africa.We earn 90 per cent of our foreign currency through the sale of oil and yet the sector contributes only 28 per cent of our Gross Domestic Product. Some of our OPEC counterparts have capitalised on the wealth of the oil and gas industry to stimulate national development, but unfortunately we are yet to do so. In the 1970s, we became enamoured with the black gold and the easy money associated with it. Since then, we have become a mono-economy, over-reliant on one sector which is, in itself, reliant on an unpredictable global market economy and its volatility evident in particular over recent years.As a nation, we produce only 4,000MW of electricity on a good day, and yet our wealth as a nation is not in oil, but in gas, a cheap source of fuel for power generation. Nigerias agricultural sector, which continues to provide the largest contribution to its GDP, largely depends on imported fertiliser and is nowhere near realising its potential. Imagine how large the demand for fertiliser will be once mechanisation and expansion take place. The main requirement for the production of fertiliser is gas. Our manufacturing sector, which in 1980 contributed 14 per cent to our national GDP, has declined to the extent where today, it contributes only four per cent, a travesty in a country with such a fast growing population and emerging middle class with money to spend on consumer goods. At the peak of its production in the 80s, there were up to 250 different and distinct textile firms in Nigeria providing jobs for approximately 350,000 people directly, with uncountable number of people employed indirectly.Now the industry is in a free fall. So have you ever wondered where the jobs have gone' They went with the collapse of industry and our inability, to date, to kick-start industrial development again.The main excuse used for the failure of manufacturing is poor infrastructure and the lack of reliable and cheap electricity supply, for which the oil and gas sector has a solution.Over recent months, the Petroleum Industry Bill and the removal of the fuel subsidy have been at the forefront burner of national debate. The government has already introduced and passed the Local Content Act to promote indigenous participation in the oil and gas industry. The problem we face is that our history is replete with haphazard implementation and abandonment of grandiose policies. Right from Operation Feed the Nation and the Green Revolution of the late 1970s and early 80s, to the Structural Adjustment Programme of the Ibrahim Babangida administration, successive governments have pursued programmes and policies aimed at restructuring and diversifying the productive base of the economy. Unfortunately, each initiative only ended up being abandoned by succeeding administrations. But that is a discussion for another day.As these policies that will guide the future development of the industry are debated and finalised, we should be asking ourselves the following questions; how has the industry fared in the last five decades' How has the oil industry impacted on other traditional sectors' How can the industry be used to drive national development' With the existing fiscal imbalances in the polity, do we have the market structure that can correct this imbalance and ensure that our cash inflow is higher than our cash outflow' Do we have the type of education that can build the requisite skill set to domicile the expertise at home or replace foreign manpower in the coming years' Do we have basic infrastructure that can allow for production and a thriving manufacturing industry'Fundamentally, we need an integrated oil industry that will be powered by technology and innovation. We need to tap into the gas market and use it to power our industries and to generate electricity. There is also the need to redefine the downstream sector and expand into renewable energy. The oil and gas sector has the potential to act as the driver for growth and, therefore, provide the prosperity of tomorrow.Generating wealth must go hand in hand with an integrated development plan. This is clear from the level of opposition from the grass roots and labour to the removal of petroleum subsidy. We must also tackle environmental issues in the Niger Delta, which continue to impoverish millions of Nigerians by disempowering them from carrying out the most basic of subsistence means of livelihood. Disregard of the environment is one of the major obstaclesfor the sustainability of the oil industry as the deprived will not relent in seeking redress, often to the detriment of continued oil production and exploration activities. We cannot continue to operate as though the oil producing areas are a separate part of the nation underserving of human existence. There are too many families whose lives are endangered.We need a sustainable approach to reverse the recurrent environmental degradation and to empower the local communities economically. We need a business model that will domesticate the revenue in the industry and help us insure future barrels at a healthy price. Much of our revenue falls through the cracks due to the high cost of foreign experts and technology that we have not deliberately developed locally. Hence, our cash outflow is higher than our cash inflow. We need to start thinking more deeply about development and not just growth and we must focus on enacting policies that can retain the cash in the system by domesticating technology and developing local manpower.- Etete is CEO, Century Group, Admiralty Way, Lekki Phase 1, Lagos.
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