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By Luke Onyekakeyah
It is disheartening and lamentable that anytime there is shock in the price of oil, no matter how small, the Nigerian economy goes into tantrum and the “economic managers” begin to run helter-skelter looking for “oxygen mask” to put it on life-support. This episodic tantrum is a national embarrassment that the country’s leadership don’t want to appreciate and address, which explains why the problem persists.
Each time the national budget is being prepared, the “experts” recognise that the dollar benchmark could change. They recognise that should the change point downwards, the budget would be messed up. While the “experts” recognise all these, they go ahead and prepare the budget and leave it there, sit at a corner hoping that the oil price doesn’t go down.
If, at the end, nothing happens to the oil price, or, if at least it remains stable at the proposed budget benchmark, they puff champagne, wine and dine in merriment. Hurrah, the projections based on hope, fear and uncertainty did not backfire. The temporary stability would have given false proof that the experts made a proposition and it worked. But they forget to realise that if it worked for this year, there is no guarantee that it would work the following year.
But which country or countries run their economy based on fragile hope that hangs on factors that you don’t control? Rational economic planning/management must be based on facts and figures. It was the legendary Albert Einstein who said it is madness to continue doing the same thing and expecting a different result. Is it not madness to be running the Nigerian economy the same way, every year, and expecting a different result – growth? How do you prepare a budget based on oil whose price is indeterminate?
How Nigeria could be struggling with oil price fluctuation every now and then without an attempt to resolve it once and for all is most perplexing. Oil price vacillation is a reality that cannot be controverted because the cause(s) are often beyond human control. Anything can happen anywhere in the world and the price of oil is affected. Something like corona virus that has triggered the current oil price downturn is extraneous and outside human control. Did any expert anywhere project that such a deadly virus would emerge from China and spread worldwide to shake the global economy?
I don’t give a hoot if the oil price falls to N20/barrel or lower. Perhaps, it is only then that Nigeria would wake up from slumber and do the right thing. Why the hysteria every time the price of oil falls below the imaginary budget benchmark? There is no sense in doing that if the economic managers did their work well.
Over this boom period, oil producing countries reaped huge revenue that the wise ones applied judiciously to uplift their economy. Nigeria reaped huge petro dollar. Countries like Saudi Arabia, the world’s biggest oil exporter, took full advantage of the sustained rising oil prices to build new cities.
The projects were designed to burnish the country’s image, develop non-oil economy and generate enough employment to maintain social stability.
Saudi Arabia reportedly built an “Economic City” named after King Abdullah from past oil boom. It is a mega project that cost about $27 billion. The integrated city was designed to include a power plant, a desalinization plant and a port, industrial district, a university and residential area for two million people, among other facilities. It is definitely an ultra-modern project, strategically taking advantage of oil windfall to boost that country’s economy.
The catalogue of countries taking advantage of increased oil revenue to boost their economic potentials is noteworthy. Even the newly oil-exporting countries like Chad and Sudan are not left out. Reports say the Sudanese capital Khartoum is blooming with new skyscrapers and five-star hotels despite the crisis that plagued the country.
The general economic landscape in Nigeria is still appalling. The general welfare of the masses remains pathetic and depressing. Nigerians are looking forward to the day when they would witness a turnaround in their fortunes arising from a deliberate action of their leaders at all levels.
When I remember that there are countries without oil that have highly developed economies, it strengthens my unconcern about what the price of oil may be. If the oil price comes to $10/barrel, there will be nothing to steal by anybody. If many countries without oil could survive on the other natural endowments they have, then it is foolhardy to take oil as the life-wire of our economy. Oil is just one out of the hundreds of other resources that Nigeria is endowed with. Why then the jittery about oil price?
When oil price was above $100/barrel, for instance, a large proportion of the income was stolen leaving about 10 per cent that goes into national development expenditure. If oil price comes to $10, the economy will still run as the revenue would most likely be applied judiciously. About 10 per cent is what Nigerians get while the rest are stolen.
Between 1960 and 1967 when the civil war broke out, the average price of oil was $24/barrel. The price went down to $22 in the early 70s. What was recorded as oil boom from 1975 was $58.50. While the Head of State, Gen. Yakubu Gowon built flyovers with oil price of $24, which made him declare that Nigeria’s problem is not money, the present political leadership cannot repair the Lagos-Ibadan Expressway since 1999, or do anything else.
The pre-war period was the golden age of Nigeria. That was when the regions boosted their potentials from diverse economic activities and products, particularly agriculture. During those yester years, there was no oil money to steal. The political leadership in the regions focused on development using what was available.
Section 44 (3) states: Notwithstanding the foregoing provisions of this section, the entire property in and control of all minerals, mineral oils and natural gas in under or upon any land in Nigeria or in, under or upon the territorial waters and the Exclusive Economic Zone of Nigeria shall vest in the Government of the Federation and shall be managed in such manner as may be prescribed by the National Assembly.
Beyond any conceivable imagination of Nigerians, this section of the constitution, unreservedly and with total finality, confers the ownership and control of all mineral resources of the country, including those found in the adjoining territorial waters, on the Federal Government. That is to say Abuja has unwavering powers to exploit the minerals as it deems fit without hindrance or opposition. This is the crux of Nigeria economic problems.
The call for restructuring dovetails into the clamour for economic diversification. The two face the same hurdle in Section 44 (3) of the constitution. Unfortunately, the same lip service being paid to restructuring is also paid to diversification. Everyone in government talks about diversification without mentioning the constitutional hurdles facing it. And not until this constitutional brick wall is torn down, there would be no headway for Nigeria, at least, economically.
