Nigeria intends to follow Dubai’s example
Following the example of Dubai, Nigeria is thinking of diversifying its economy and activities so as to benefit its people.
Currently, Nigeria is in the process of electing a new president in the middle of a Boko Haram rebellion, while the country’s economy is suffering. Nigeria’s economy is currently unstable due to decreased oil prices, a devalued naira and decreasing foreign reserve. Whichever candidate is elected in the upcoming elections, at the end of March, will have his hands full.
It is anticipated that the next president will inherit numerous economic problems, even though the country’s rebased Gross Domestic Product (GDP) seems healthy, the reality of the matters prove the opposite.
Home to 174 million in total, Nigeria holds one of the most devastating poverty levels throughout the globe, ranking after China and India. As statistics have revealed, before the plunging of oil prices, more than 60% of its population lived on less than one dollar on a daily basis. These statistics were taken when the average value of crude oil amounted to $120 per barrel. Now that the price of oil has soared downwards matters are far worse than before.
Apparently, all the profits derived from oil were deposited into Nigeria’s Excess Crude Account and foreign reserve, but since then these funds have been spent. Electricity is incredibly low in Nigeria, where only 4500 megawatts is generated for the entire population. It is important to note that although Nigeria is one of the main crude oil exporters, it still imports refined crude oil.
Unemployment rates are also on the ceiling. Generally speaking Nigeria is in for a severe recession.
Dubai’s Model for Nigeria
On a bright note, we have all witnessed economies go through major booms and lows. Having said this, numerous countries have gone through similar situations as Nigeria and recovered stronger from it than ever before.
One of the United Arab Emirates (UAE) main cities, Dubai also went through a severe slump a few years ago but has emerged stronger than ever. Presently, Dubai is a tourism, commerce and oil hub. The reason for Dubai’s success is attributed to its newly diversified economy, as it is no longer dependant on oil.
Similar to Nigeria, Dubai was not always so confident and strong when it came to economic principles and strategies. In the 1900s Dubai’s economy was based on pearl diving and trading, which crumbled in the 1920s when Japan started manufacturing artificial pearls. In 1929 when the Great Depression hit, Dubai’s economy was hit even harder.
Dubai’s economic history reflects Nigeria’s current situation. Nigeria has lost its main crude oil exporter-the USA but also has to compete amongst other crude oil exporters in the Arabian Peninsula. The healthy economies of countries part of the Gulf Cooperation Council (GCC) have the benefit of being more flexible with the prices they offer Asia countries. Another matter in hand is the naira is rapidly losing its value and Nigeria is facing crucial problems concerning the funding of its 2015 Budget.
While the oil market stabilizes, Nigeria needs to find various other sources to generate revenue just as Dubai did in the past, when instead of diving for pearls the people started to fish. It is high time for Nigeria to start doing something in order to save its economy, and modelling Dubai’s footsteps is a great start.
What makes Dubai such a great example to follow is the fact that it has developed from a desert landscape into a top-notch 5-star city in merely a few years. This fact reveals the city’s strong determination, ambition as well as will to succeed and prosper economically.
One of the main problems Nigeria faces is corruption, which mainly stems from the government. Ever since the 1950s, when oil was discovered, Nigeria has remained one of the least prosperous countries in the world. This is because the few and not the entire population enjoy oil revenue, which reveals that the government has failed to lead the nation properly and efficiently.
Countries, which prosper, have a few features in common including competent leaders who set up institutions that warranty security for their people and property, as well as guide and encourage economic growth. Competent leaders also are those who offer public infrastructure, creates effective and fair legislations and enhances trade as well as private participation.
Nigeria’s industrial sector has not evolved over the years due to the almost non-existent electricity supply. What’s more, all the governments that have passed through had absolutely no idea or theory on how to fix this problem. On the other hand, once Dubai discovered its oil in 1966, the emirate’s leaders used the revenue they received to fund infrastructure as well as the creation of ports and construction of 5-star hotels. The emirate’s leaders shared a vision that Dubai would one day develop into a major trading and tourism hub.
Even though Dubai did not generate as much oil revenue as its neighbour, Abu Dhabi, leaders’ focused and visionary economic plans have led it to change, develop and turn into the financial hub it is today. Furthermore, Dubai’s leaders proved to be sincere and true, as they could have kept the oil revenues for themselves as the majority of corrupted leaders do.
Therefore, it is high time Nigeria deals with its corruption issues and undergoes a complete makeover! For starters, the country must revamp its fraudulent institutions, reorganize its education system, invest funds in its infrastructure and diversify its economy. Some support the idea of reengaging in cocoa plantations and groundnuts. Most importantly, Nigeria mustn’t lose confidence and remain focused, as so many other nations have faced the same troubles but emerged stronger.