9 - We Live in the Future: Is Nigeria No Longer an Oil State?

Summary

Introduction

Of all of the things we think we know about Nigeria's particular form of democracy, one of the most persistent and widely shared is that it is closely related to a political economy dependent on sharing the revenues from oil exploitation. In materialist terms, everything from the intitutional forms and structures through which political action and public spending are filtered, to the identities and social linkages which come to the fore in political sociology, have been arranged around and invigorated by the flows of hydrocarbon revenues out of the mangrove swamps, into a central pot and outwards through the capillaries of formal and informal government spending. In both scholarship and popular discourse, there is a remarkable pervasive accepted ‘fact’ that oil and gas revenues account for 85% of Nigeria's revenues, which has acquired axiomatic status over the years simply by its frequent citing. This figure persists despite a growing realization that Nigeria may be approaching a ‘post-oil’ economic transition. Recent variations include the claim that oil is 80% of Federal Government revenues (Omoregie 2018, citing unspecified national statistic source), that it constitutes 77% of total government revenues, according to the governmental body Nigeria Extractive Industries Transparency Initiative (NEITI 2016)2 or that it is 65% of all revenues to government (EITI 2019, 2020). Very few such claims are presented with supporting data. Related to that assumption is that, correspondingly, the state collects comparatively little revenue from other sources such as income or transaction taxes. However, data on exactly what this might be are frustratingly hard to reconcile.

This study began as an attempt to determine more precisely what the exact proportion of Nigeria's gross domestic product (GDP) collected as oil versus non-oil revenues might be, in order to map this change. However in doing so we also uncovered a more significant issue in the data: when looking at aggregated revenue across both state and Federal governments, we find that, rather than being on the road to a post-oil transition, Nigeria already passed this point in 2015, the first year since 1971 when real-terms non-oil revenue outstripped oil revenue. This potentially has far-reaching consequences and should help to update our understanding of how Nigeria's political economy – and especially the link between economic activity and government revenue – actually should be interpreted at the start of the third decade of the twenty-first century.