With Dubai’s example in mind, Nigeria must diversify its economy so its people see the benefits.

As Nigerians prepare for a presidential election amid a Boko Haram insurgency, the question remains: What about the economy? With falling oil prices, a depreciating foreign reserve and a plunge in the value of the naira, Nigeria is in economic uncertainty. Whoever emerges victorious from the polls on March 28 will have his work cut out for him.

The country’s next president could face a myriad of economic problems. While a rebased gross domestic product (GDP) makes Nigeria look good on paper, the reality on ground proves otherwise.

With 174 million people, Nigeria has one of the worst poverty levels in the world, ranking third behind India and China. At least 61% of the population survive on less than a dollar a day, and this was during a period of economic boom when crude oil averaged about $120 a barrel, far beyond the country’s budget benchmark.

While the gains of the oil boom were reportedly stashed in Nigeria’s foreign reserve and Excess Crude Account, most of the funds have since been frittered away. Electricity is almost non-existent, with a measly 4,500 megawatts generated for the population; refined crude is still being imported in a nation that is a major exporter of crude oil. Unemployment is at an all-time high, and virtually nothing works. Like a Dutch-diseased economy, Nigeria is about to feel the full brunt of a recession.

Dubai’s Model for Nigeria?

Of course, economies go through booms and busts. And several nations have gone through situations similar to Nigeria’s and emerged for the better.

A case in point is the United Arab Emirates (UAE). As one of the seven emirates making up the UAE, Dubai has been through its own economic boom and bust. It is now a world destination for tourism, a center of commerce and a model for major oil exporters seeking to diversify their economy.

Like Nigeria, Dubai wasn’t always so savvy in economic principles. In the 1900s, the main stay of the Dubai economy was pearl trading and pearl diving. However, following the emergence of artificial pearls from Japan in the late 1920s and the Great Depression of 1929, Dubai’s economy took a downward spiral.

Dubai © Shutterstock

A parallel can be drawn here with the current situation in Nigeria. Not only has the country lost a major customer for its crude oil in the United States, but Nigeria also has to face stiff competition and price wars from the Arabian Peninsula in the battle for market share. While the robust economies of the Gulf Cooperation Council allow them to offer discounts to Asian buyers even in the face of dwindling oil prices, such tactics do not come easily for Nigeria. As it stands, Nigeria faces problems financing its 2015 budget, while the naira is losing value.

Just like pearl divers in Dubai learned to cast their nets for fish rather than jump in for pearls, Nigeria would be wise to seek other sources of revenue while the oil market gains some form of stability. Perhaps it is time for Nigerian leaders to seek lessons on how to jumpstart an economy — and Dubai is probably a good place to start.

What makes the emirate worthy of emulation is that despite being in a region bedeviled with crises and an arid landscape, Dubai has gone from being a desert to a world-class state, dazzling and ambitious in development. Dubai shows how sincerity of purpose, true leadership and strong institutions contribute to economic prosperity.

Nigeria’s biggest problem is corruption, which likely stems from insincere governance. Since the discovery of oil in the 1950s, Nigerians have remained poor while oil wealth is concentrated in the hands of a few. This is the result of one thing: a failure in leadership.

To prosper, nations need leaders who put in place strong institutions that guarantee security of lives and property; leaders who coordinate and promote economic growth; and leaders who provide critical public infrastructure, formulating laws that facilitate trade and private participation.

The absence of constant electricity has been a major impeding factor to an industrial revolution in Nigeria, and successive governments seem to have no idea how to change the trend. When oil was discovered in 1966, Dubai’s leaders chose to quickly use the receipts from oil rent to finance mass infrastructure, building large ports and 5-star hotels that would one day make the emirate a major trading hub and tourist destination.

While the judicious use of Dubai’s oil receipts were probably due to the fact that its oil reserves were not as vast as Abu Dhabi’s, the fact remains that having sincere and visionary leaders helped put Dubai on the path to prosperity. Indeed, Dubai’s leaders could have pocketed the cash from oil rent or shared the funds among a select few, as most corrupt leaders often do.

So, as harsh economic realities beckon, it is time for Nigeria to overhaul its corrupt institutions, revamp its educational system, invest in critical infrastructure and perhaps revisit the cocoa plantations and groundnut pyramids the country was once known for. And just as Dubai learned from its mistake of depending on a major source of revenue in the early 20^th century and instead diversifying its economy when oil was discovered, Nigeria must not be complacent at a time when respite does come.

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

Photo Credit: Umar Shariff / Outcast85 / Shutterstock.com

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