By:  Amina Bello

“Diversify the economy!” It is the unanimous cry of every economic plan since the 1970s. Yet, here we stand, perpetually vulnerable to the boom-bust cycles of the international oil market. The common explanation points to Dutch Disease, poor planning, or a lack of will. But what if the persistence of the oil mono-economy is not a failure of policy, but a successful political outcome for a decisive segment of the ruling elite?

Oil revenue is the perfect political resource. It is centralized (flowing to the federal center), lucrative, and requires no productive broad-based effort—only control of the state apparatus to capture it. This creates a "rentier" logic that actively discourages diversification.

The Political Calculus of Oil Dependence:

Control Over Patronage: Distributing oil rents (through contracts, budgets, import waivers) is the primary tool for building political loyalty and maintaining power. A diversified, tax-based economy would decentralize economic power to states, localities, and productive citizens, diluting federal control.

Avoidance of the Social Contract: When governments rely on taxes from citizens and businesses, they become accountable to them. You must provide services to justify taxation. Oil money is “free money” from the ground, severing the accountability link between leader and populace. Why foster a vibrant, demanding private sector when you have an independent revenue stream?

The High Bar of Competence: Building a diversified economy requires complex, consistent policies across sectors—power, transport, security, education. Managing an oil cash cow requires a simpler (though violent) calculus: control the pipelines and the treasury. For an elite unsure of its ability to compete in a complex global economy, the low-effort, high-reward oil model is seductive.

Every attempt at diversification bumps against this calculus. Agriculture? Truly reviving it would empower millions of rural voters and reduce the political weight of urban centers. Manufacturing? It requires reliable power and trade policies that would hurt import-dependent network cronies. A Tax-to-GDP Revolution? It would empower a citizenry that can rightfully demand accountability.

Therefore, breaking the mono-economy is not just an economic project; it is a profound political restructuring. It requires dismantling the centralized oil rent system and forcing the state to rely on its people. This could mean radical fiscal federalism, transparent sovereign wealth funds, or constitutional limits on oil revenue spending.

Until the political incentives change, “diversification” will remain a beautiful slogan on documents, while the ugly, comfortable reality of oil dependence continues to fuel our politics and impoverish our future.

Amina Bello

 (Economist & Development Strategist)