Nigeria Must Turn Oil Wealth into Lasting Economic Value

After almost seven decades of commercial petroleum production, Nigeria still faces a basic question: what has it truly gained from its oil wealth?

That is the challenge raised by Wumi Iledare, a petroleum economist and professor emeritus of petroleum economics, in a commentary marking his 75th birthday on September 6. His reflections draw on decades of watching Nigeria move from the optimism of its early oil discoveries to heavy dependence on crude oil revenues.

In the commentary, titled “PEWI @75: Reflections on Nigeria’s Petroleum Industry, Value Creation and the Unfinished Economic Journey,” Iledare said petroleum had generated substantial foreign exchange, public revenues, infrastructure and professional capabilities. Yet he argued that the country had not fully converted its resource endowment into sustainable economic value.

“Production is not prosperity; revenue is not development; and resource abundance is not wealth,” Iledare stated.

He said petroleum policy should not focus solely on maximising government revenue from each barrel produced. Instead, it should create conditions that encourage investment and maximise the present value of public revenue throughout the life of the country’s petroleum resources.

Iledare described the Petroleum Industry Act of 2021 as a major milestone. The law sought to reset Nigeria’s petroleum governance framework through institutional, fiscal and regulatory reforms, but his broader argument remains that producing oil and collecting revenue are not enough to create lasting prosperity.

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Production is not prosperity; revenue is not development; and resource abundance is not wealth.