Energy in economic development, the case of oil producing Nigeria and non oil producing Tanzania.

Energy problems in the developing countries pose a policy dilemma. For the economy to advance from a subsistence and impoverished stage to a self sustained developed economy requires extensive energy fed modernization. In all sectors that could be targeted which include agriculture, industry and services, the energy implications depend on the strategy adopted. Both the capital and labour intensive strategies of development involve some basic energy implications. Especially since the 1973 oil price increases, these problems have been exacerbated with the oil importing developing countries like Tanzania being particularly hit. The little that had been achieved in terms of growth was subsequently wiped out. While this is true of the oil importing developing countries, oil exporting developing countries like Nigeria were able to temporarily weather the storm but these countries are still faced with enormous energy problems. The inability of Nigeria to achieve internal energy balances in the face of huge energy resource endowments, indeed, in overall development, opens a new dimension to the analysis of underdevelopment. It clearly indicates the need to shift emphasis away from the 'traditional' premise of 'lack of resources' as a focal point and platform from which underdevelopment is analysed. There is a need to focus on inefficient managerial capabilities and inept Leadership which are themselves problems of underdevelopment. With particular reference to energy, such incapability also throws some light to the technical problems highlighted, by the fact that relative to the dynamics of the underdeveloped economies, the possibility of fuel substitution in commercial energy on the one hand, and on the other, traditional energy for commercial energy is limited. Understanding the dynamics of these problems necessarily indicate the complexity of energy problems and indeed, overall development problems in the developing countries. Thus, while attempts to increase supply to satisfy demand may be necessary, we believe that other areas of policy such as effective energy management and energy conservation are also vital and important to the overall strategy. This aspect of energy is controversial. Whether energy privatisation or overhauling existing bureaucracy will provide the optimal solution is debatable. Thus, the thesis focuses attention on the role of energy in development, sources of energy in the two countries, and on the appraisal of energy institutions and management in developing countries.