Akwa Ibom State is Nigeria’s number one producer of Petroleum and currently according to the Federation Account Allocation Committee (FAAC), ranks as the highest collector of the Federal Government allocations to states (8.69% at N21.4b shared in January 2014) followed by Delta (6.38%) and Rivers (6.14%) then Bayelsa (5.22%). However in the chart of Internal Revenue released by National Bureau of Statistics, Akwa ibom ranked number six in 2012 having generated N13.5b. Data for more recent Internal Revenue statistics are not reachable to improve the quality of our analysis over the past two years but it is worthy of note that from available data, Akwa Ibom remains the only core oil producing state with their Internal Revenue lower than the Federal Allocation. For example Rivers state received N15.2b Federal Allocation in January 2014 and generated N66.3bn internally in 2012. Likewise, Delta State received N15.7b Federal Allocation in January 2014 and generated N45.6b internally in 2012. Akwa Ibom received N21.4bn in January 2014 and generated only N13.5bn internally in 2012. This goes to justify my earlier assertion of Akwa Ibom state as currently playing a very passive role in its income or economy.
My lecturer Mr. O. I. Akpanika identified three eras of government participation in the oil industry to include THE ERA OF ROYALTY (1956 – 1970) where government only played a passive role limited to the collection of royalties, taxes, rents and other dues from firms (companies paid taxes and royalties to government); THE ERA OF SHAREHOLDING (1971 – 2004) where government went into joint venture partnerships with companies (government actually shared income and expenditure with foreign companies) and THE ERA OF ACTIVE INVOLVEMENT (2004 – date) in which government seeks to actively use Nigerians to operate Nigerian Fields through Local Content and Marginal Field Development Programs (government started producing on their own too). The active era witnessed the emergence and growth of indigenous Oil and Gas companies in Nigeria thus expanding the job opportunities in the industry and growing oil production and overall oil revenue in the country.
It could be roughly argued that the income of Akwa Ibom State is predominantly dependent on oil derivations then taxes on civil servants and then others. This is justified by the fact that a large percentage of workers in Akwa Ibom are civil servants then followed by traders. Eliminating oil derivation the State will be so dependent on Civil Servants and few other contributive sectors for internal revenue. This is very typical of a government operating in an era of royalty as described by Mr. Akpanika.
Revisiting the pre-oil Nigeria (i.e. before 1956), steady economic growth made Nigeria the giant of Africa. The economy of this country was mainly dependent on Agriculture and more than 70% of the population were engaged in Agriculture. Above all, food was cheap accustomed by relative peace. The advent of petroleum thereafter caused a National economic boom with a resultant neglect of Agricultural in Nigeria such that Agriculture now resembles a venture for the poor seeking to survive. But this is not true. The neglect of Agriculture and the celebration of Petroleum is in my opinion the reason Nigeria is rich and has a good economy in digits but Nigerians are poor with majority living below the poverty line: rich Nigeria, poor Nigerians. This is because through oil and gas economy, a few Nigerians are participating compared to agriculture where a large population of the country is engaged. Corruption and associated conflict are the curses accompanying the blessed Nigerian oil. The awoofness of oil revenue has made it difficult for government to focus, plan and monitor the economy of the country. However this piece was not to discuss Nigeria but Akwa Ibom State.
Akwa Ibom as a State became established in the oil economy Nigeria and has been feeding on the oil funds especially with the 13% oil derivative. For about sixteen years now the state has been working on providing the basic amenities of roads, electricity and water and so far has recorded reasonable success in roads, fair grade in electricity but very poor effort in water supply. The state is currently claiming efforts towards industrialization, but in order not to invest where we will not reap from in the long run and where the larger populace will not benefit from, a question worth investigation is: what kind of industries will be compatible and efficient for Akwa Ibom currently?
I have studied to an extent the use of tourism in Akwa Ibom as a means of boosting the economy. What the proponents of this idea however failed to understand is that tourism or call it entertainment can only come after the basic needs of life as identified by the economists as food, clothing and shelter – needs for survival. These are the needs. Entertainment is a want, not a need and a well define scale of preference will advise investors to check the food, clothing and shelter industries at this infant stage of industrialization and this is well taken care of by the agriculture sector – commercial and large scale agriculture against the subsistent and small scale agriculture. Therefore the initial inclination of investments towards the building of hotels and parks by the state and private individuals ignores a more profiting potential and necessity embedded in Agriculture. Tourism tends to provide hospitality to visitors, serves a relatively few customers and offer little or negligible benefit to the citizens compared to Agriculture. Therefore industrialization should precede tourism and if the state must establish industries, it is more beneficial to establish near raw materials meaning that two types of industries will stand the test of time in Akwa Ibom and witness consistency and growth: Agro-allied industries and petroleum industries. I wish therefore to revisit Agriculture in Akwa Ibom State.
Akwa Ibom is rich in more than oil. The soil offers a range of mineral resources from gold, limestone and clay to salt, coal, silver nitrate and glass sand. An abundance of arable land and a favourable climate provide the right conditions for year-round agriculture not to mention the water ways blessed the state. From my investigation, more than 40% of the land in Akwa Ibom is undeveloped for agriculture or other purposes. Yet the state is still importing food stuffs like garri, yam, vegetables, meat etc. because the local production of these items is not enough to satisfy local demands thereof. Products like biscuits, bread, sausages, canned tomatoes, noodles etc are also heavily brought into the state thereby causing a high cost of feeding in the state. These are things that can be produced from within. The cultivation of cash crops and the establishment of agro-allied industries in Akwa Ibom by the government and private firms to convert these crops to finished products even for exportation will boost employment opportunities in the state, provide more revenue and make cheaper the cost of living. This way the state will be actively involved in her net income received.
Due to this and many more, I urge the government of Akwa Ibom State and private investors do more in the actual mechanization of Agriculture and establishment of Agro-allied industries in the state. We should avoid bringing in industries that will require the importation of raw materials from outside and companies that will end up generating revenues to government without direct benefits to the citizens. In addition, missing funds through the company-government-citizens channel (like in the oil companies) will be reduced as the citizens will have direct benefits from the agro-allied industries (like in getting products at cheaper rates). The government can establish at least one commercial and mechanized farm in each of the 31 local governments to cultivate crops and rear animals most suitable with the nature of the locality and establish processing plants nearby. These farms and perhaps the associated allied industries can be privatized with time for their survival.
Finally, it can be seen therefore that Agriculture holds a great growth potential for Akwa Ibom State in the impending industrial revolution. This is my very imperfect opinion.
