The “resource curse” is what happens when a country is rich in natural resources, but stays poor, unstable, and underdeveloped because of it. Nigeria is the textbook case.
How it plays out in Nigeria, the Oil dependence: Oil and gas account for 80% of exports and 50% of government revenue. When one commodity funds the state, everything else gets neglected. Agriculture, manufacturing, and tech never got the same policy attention or investment.
DUTCH DISEASE: Oil dollars strengthen the Naira, making imports cheap and Nigerian-made goods expensive abroad. Result: factories close, farms can’t compete, jobs move out. We end up importing what we used to produce.
RENT-SEEKING: Where money flows from the ground instead of from taxes, accountability weakens. Politicians don’t need to tax citizens to spend, so citizens have less leverage to demand services. “Sharing the national cake” replaces “earning and budgeting.” Off-budget spending and leakages thrive.
CONFLICT AND INSTABILITY: Resource control fights fuel militancy in the Niger Delta, and politics becomes a zero-sum game for access to oil money. Institutions get captured.
THE HUMAN COST; Despite earning over $800bn from oil since the 1970s:
– Poverty and unemployment remain high
– Power, roads, schools, and hospitals are still inadequate
– Budgets get gutted when oil prices crash, like in 2016 and 2020
– Citizens were told to “tighten belts” while revenues disappeared from public view.
WHY OTHER COUNTRIES ESCAPED IT: Norway, UAE, Botswana put oil money into sovereign wealth funds, diversified economies, and strong institutions. Nigeria’s challenge has been weak institutions, policy inconsistency, and treating oil revenue as income, not capital to invest.
THE WAY OUT FOR NIGERIA
1. Diversify: Move revenue base from oil to taxes, manufacturing, services, and solid minerals.
2. Save and invest: Fund a real sovereign wealth fund and infrastructure, not consumption.
3. Transparency: Publish all oil receipts, contracts, and extra-budgetary spending. EITI and FOI must be enforced.
4. Fix institutions: NNPC, CBN, and MDAs need audit trails. No more ghost agencies or parallel spending.
Nigeria doesn’t have a revenue problem alone. It has a governance problem. Oil didn’t curse us. How we managed oil did.
Until we treat resources as a tool, not a crutch, the curse continues. And ordinary Nigerians will keep paying the price.
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bcradle@ymail.com