Understanding the Dutch disease: Nigeria is suffering from the Dutch disease yet She does not wish to recover

Just last week, it was all over the news, the Petroleum minister Dr. Ibe Kachichukwu announced that oil exploration in the north will commence by the 3rd quarter of this 

year (that is between September and December). With the way the announcement 

was made, the minister was expecting us to clap hands for the petroleum ministry
because they really are busy looking out for more oil … yet this administration is trying to diversify our economy…

           Dutch disease is an economic term or an economic sickness that occurs when a country’s natural resource leads to economic problems. Normally, when a country 

has a resource like mineral such as coal, crude oil, steel, limestone or raw materials like palm oil, rubber, hides and skin, groundnut e.t.c, the country is expected to benefit from such a resource because they can sell it for money which they can use to develop their country. It becomes Dutch disease when this resource which is supposed to bring money for economic development is now causing problems for the economy such that something that should have been a blessing is turning around to be a curse. Let me describe this disease with a story…

 Mr. and Mrs. Johnson have been married for 20 years without a male child. Though they had 5 girls who were doing fine, Mr. Johnson insisted on a male child that will carry on his name, so they kept on praying. 3 years later they gave birth to a boy. They became very happy; Mr. Johnson now has an heir, the male child that will carry on his name. Mr. Johnson dedicated everything he had to training boy Johnson. Boy Johnson was very intelligent, making the best grades in his class, something that none of his daughters had ever done. Few years later, Mr. Johnson used all the money he had to send boy Johnson abroad. He stopped paying school fees for his daughters and withdrew them from school so that there will be enough money to train his son abroad. Boy Johnson went abroad and continued performing as excellently as ever, oh! What a blessing he was, bringing awards back home from his school abroad. Mr. Johnson increased the attention he was giving to Johnson pumping money and resources to him abroad ignoring his daughters whom he regarded as normal girls compared to his extraordinary boy Johnson. After some years, boy Johnson finished school abroad and came back only to discover that he has a sickness that is about to kill him. He could only get a menial job that is only enough for him to feed himself. At the break of this news, Mr. Johnson had a stroke and was bedridden; he was left with his rejected daughters, they cared for him with the little money they collect from their husbands. But Mr. Johnson was still hoping that his son will be cured of his sickness. So from his retirement pension Mr. Johnson still sends funds to boy Johnson who is now 30 years of age, hoping that he would return to his past glory while giving nothing to his daughters. The situation Mr. Johnson is in is the DUTCH DISEASE situation.

             Now think of Mr. Johnson as Nigeria, Boy Johnson as Crude oil and his Daughters as the non- oil sector of the economy then you will understand the Dutch disease. The crude oil which Nigeria found that was supposed to be a blessing has now turned around to become a curse to Nigeria. This is why Dutch disease is also called RESOURCE CURSE. Discovery of oil has led to the neglect of the other non-oil sectors of the Nigerian economy such agriculture, and solid minerals (Mr. Johnsons daughters).

           The funny side is that for up to a year and six months now, the non-oil sector has become the major driver of the Nigerian economy with the problem oil price is currently having in the international market. Just like Mr. Johnson instead of seeking out way to develop the non-oil sector that has been catering for the country, Nigeria is still spending money in exploring oil in the North. Perhaps they find oil in the North, our Dutch disease will only get worse. Yet the state petroleum minister is gladly announcing the exploration of oil in the North. What a country!!!

Note: The situation was called Dutch disease because it was first noticed in the Netherlands when they found deposits of natural gas in their country.

The name Dutch disease was given by THE ECONOMIST an economic analysis forum in 1977. What's your take on this?