THE BLACK GOLD; a precious and somewhat rare commodity believed to be one of the many blessings that God gave to only His special children, But is it really a blessing or a curse? The black gold otherwise known as crude oil is said to be a naturally occurring, unrefined petroleum product composed mainly of hydrocarbons deposits and other organic materials.
Crude oil has over the years been a mainstay in several economies in the World, it's like a precious jewel most of them can't do without, the commodity accounts for about 70% of GDP in some cases. The price of the commodity reached an all time high of about $145.31 per barrel in July 2008 hence seen as the savior of many oil producing countries, But it's said that whatever goes up must surely come down, well this seems to apply in the price of oil over the years.
Crude oil has over the years been a mainstay in several economies in the World, it's like a precious jewel most of them can't do without, the commodity accounts for about 70% of GDP in some cases. The price of the commodity reached an all time high of about $145.31 per barrel in July 2008 hence seen as the savior of many oil producing countries, But it's said that whatever goes up must surely come down, well this seems to apply in the price of oil over the years.
Oil has truly been the black gold for most countries especially for the African continent as it has sustained their economies through exports, accounting for over 90% of export and a significant portion of GDP, But this treasure trove has turned into a real headache. Nigeria was exporting about a million barrels daily to the U.S, peaking at 1.3 million barrels per day(bpd) in 2006, and in July 2014 no Nigerian oil entered the U.S, so what happens when your one of your major buyer no longer buys from you but rather plans to become a seller as well?
Taking Venezuela as a case study, a nation that derives its wealth largely from oil, a nation with about 298.4 billion barrels of proven oil reserves, undoubtedly a nation with the largest oil reserve in the World today and also a founding member of the Organization of the Petroleum Exporting Countries (OPEC) and one of the world's largest exporters of the commodity, But yet oil couldn't save 'her' from the hash economic conditions.
Taking Venezuela as a case study, a nation that derives its wealth largely from oil, a nation with about 298.4 billion barrels of proven oil reserves, undoubtedly a nation with the largest oil reserve in the World today and also a founding member of the Organization of the Petroleum Exporting Countries (OPEC) and one of the world's largest exporters of the commodity, But yet oil couldn't save 'her' from the hash economic conditions.
The crisis in Venezuela should serve as an eye opener for countries who depend heavily on oil, a country like Nigeria which first discovered crude oil on Sunday 15 January 1956 in Oloibiri by Shell Darcy, its first commercial oil discovery. Since it was first discovered, the sector has been hit with several corruption scandals inditing top government officials not forgetting intensified terrorist activities in the heart of its oil industry; the Niger Delta, on top of the low in the price of oil and also the environmental degradation and pollution of the land.
In conclusion I'll say nations who strongly depend on oil as the main stay in their economy in revenue generation should look at developing other aspects of the economy, there are several countries doing well without oil, revenue could be generated via Tourism, Solid minerals, Agriculture, the creative sector, investment in Science & Technology and other of the economy.
Total Diversification is key in the steady growth of any economy.
Total Diversification is key in the steady growth of any economy.
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