The crash of oil prices - the golden opportunity It had been predicted. All pointers indicated so. But as is typical of Nigeria, living a reverie continued. When oil prices plummeted to an all time low of about 30% by last week, it was not like Nigeria woke up one night and discovered so. It had long been coming, and we did nothing about the options. Oil sales to the worlds biggest consumer the United States had been on a decline since the shale revolution, the reference given to Americas and in deed the developed worlds exploitation of its alternative oil assets. In October this year, Nigerias oil sales to the United States came to a complete halt, even as Ghana and Angola continued to export to that country. Ironically, while this was happening, Angola and Ghana were picking our vintage spot. The total lack of best practices added to the volatile and violent of terrorist in the Niger Delta acted very much against Nigeria. Although Nigeria turned towards China, it was a mere ego trip. The loss of Americas patronage meant the loss of leverage in relation to the worlds most powerful and influential nation, and the leadership just did not see the full import of this devastating fortunes reversal. Nigeria is a country that cherishes contradictions as its signature, often preferring chaos for order. The people obey civic rules abroad but act the opposite the moment they set foot on Nigerias soil, and it is reflected in everything we do. Here is a country in need of only 2 or 4 political parties but is running politically amok with nearly 30. It is losing battles to homegrown insurgents in the face of a lack of political commitment, choosing instead to humiliate and demystify its once outstanding armed forces. A ploy that the President would not win the 2015 Presidential election if alleged sponsors of the insurgents are compromised, or if the war is fought in a certain way has tied the Governments hands. Nigeria is getting caliphates carved out of it territory by insurgents, and yet pushing for an election, obviously, without the genuine participation of three states. Needing the National Assembly to extend a State of Emergency already twice given over the volatile North East States, the leadership is instead dissipating energy seeking on its perceived priority, to remove the Speaker of the House of Representatives who decamped to the opposition, and thereby precipitating obstacles to the State of Emergency. We have a perfect Nero type situation of the leadership dancing on campaign podiums while its military is losing battles and over 1.6 million internally displaced refugees are huddled in camps in each of the three States. Likewise, faced with the crash of oil prices, Government has not outlined a discernible structural adjustment. Instead, it is going ahead with an immorally lavish campaign that is not even tempered by the bloody bombing spree that Boko Haram has taken up lately. When we should have been looking inward and saving funds, Nigeria is spending a whooping N9.5 billion to import kerosine stoves. One would have thought that given our challenges, we would invest rather in cleaning the environment of scrap metal, and empowering our blacksmiths across the country to perfect a prototype in time. Nigerians expect President Goodluck Jonathan to pronounce some sincere sacrificial measures beginning with clear excesses in the Presidency. The fleet of aircraft said to be in the inventory of the Presidency is scandalous and must be trimmed. A reduction of aides across the board and drastic cuts in political wages and allowances, and a closure of gaping loopholes in the official perks that are nothing but wastage in both local and foreign currency is a necessity. The National Assembly must also make sacrificial personal emoluments adjustment to revert to allowances approved by the Revenue and Fiscal Commission. Every one agrees that some Executive and Legislative belt tightening measures would win from the public, enough sympathy even in the face of hardship that is certain to come in the not too distant future. In the Minister for the Economy Ngozi Okonjo-Iweala, Nigeria is proud to have a world renown economist at the helm, but sadly, best government practice is not a Nigerian forte. Over a year ago, she had let it be known that the global economy was reacting to the shale revolution which would in the end make every developed nation an oil producer. She painted a gloomy picture of the future that is now our present, and sought incidentally the current market price of oil as benchmark for Budget 2014. Her pleas fell on deaf ears at the National Assembly which at that time also made probing enquiries on the Budget 2013 Execution which the Executive was unable to answer satisfactorily. That is why looking up, one sees glowing numbers as indicators of a prolific trend in the economy, whereas looking down, one sees a deplorable reality at ground zero high GDP, but excessively high unemployment numbers even if you count motor cycle taxi operation as employment. The productive sector of the economy is by all intents, moribund. The world was drifting towards the use of renewable energy, yet Nigeria was crawling at the bottom of the value chain seeking something as basic as steadying the countrys flow of petroleum products that is sadly dependent on import of refined petroleum products. The crying need to diversify the economy from the single item of oil for export was neglected until what was put off for tomorrow has now become due in the midst of crisis. Understandably worst hit are and would be the Northern States, who generally wallowed in failure to develop infrastructure and support for the more engaging sector of the economy, Agriculture. In many States, it is becoming increasingly impossible to meet the demands of personal emoluments of idle and yet bloated civil service. If Northern Governors, particularly first termers get together and strategise on giving priority to agriculture through a targeted Marshall Plan, we would have significant instant impact. We are in dire straits, but the sky is not falling yet. We may in fact see the crash of oil prices as a golden opportunity to leverage on shortcomings and diversify by force. Brent crude under $69 dollars a barrel when the week closed, is now back up at $71. The world has been run so much on oil that it may be long before solar, nuclear, or natural gas gain prominence as alternatives with impact on the market price, and this thinking informed OPECs decision not to cut production. And what a time to now have our own Minister for Petroleum Resources Diezani Alison-Madueke as President of the Organization of Petroleum Exporting Countries (OPEC). What a time.
Posted on: Wed, 03 Dec 2014 04:14:31 +0000
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