So the other day, I was having a conversation with a friend when I realized he was angry. I asked him and he went on a rant about the fall in crude oil price, our dependence on imports and how it accounts for > 60% of our inflation rate, the apparent daily indestructibility of Boko Haram, how the Niger delta amnesty programme is slated to end next year unless renewed, the rise in inflation and so on.
Now I know some of you are wondering how this relates to the ability of the Nigerian government to pay salaries? They are all mutually inclusive events. More than 80% of our country’s GNI (Gross National Income) comes from revenues from sale of crude oil, that means that our national budget and its implementation is based on the price of crude oil internationally plus the internally generated revenues we get feom local industries. And therein lies the reality, we have just few local industries, over 85% of goods consumed in this country are imported and we export basically only crude oil. We import most goods because the cost of production of goods in this country is quite high as our power sector is not reliable. It is heartbreaking that we import even cotton wool, toothpicks. …….
We produce crude oil but we buy the refined end products. As of early quater of this year; crude oil was at >$100 per barrel, now its at $70 per barrel with a forecast of further decrease in price. Some are speculating it might hit an all time low of $50 per barrel with the way things have been going. At the last OPEC meeting, the member countries could not come to an agreement to fix crude oil price. Our dearest country imports almost all refined petroleum products and although the price of crude oil has been falling, the price of refined end products has been on the increase. A lose-lose situation for us.
I don’t even want to go into how America has increased their own crude oil production; they played a role in the Niger delta amnesty deal but I wonder now if they would be bothered as it seems like the Western oil companies are cutting down their Nigerian operations. So if Niger delta Presidential Amnesty Programme is not renewed next year due to lack of funds, then the vandalism starts again, western companies can always pack up because there are plenty alternatives to Nigerian crude. And please lets be reminded that our crude oil is not the best in the market, as it contains lots of sulfur.
Now we get to the issue of Boko Haram, I consider the events in the North Eastern part of Nigeria as war no matter what we decide to call it. This was how ISIS started. Our girls have not been brought back, its no longer News. Volunteers now called vigilantes have been hired to fight Boko Haram and they will be paid. The more crude oil prices fall, the more we become less strategic for western countries to bother intervening in our local insurgents although they are of no help to us now. And it takes lots of money to fight a war.
I believe these should be our pressing concerns instead of being more bothered with whether its a PDP or APC presidential candidate. It is high time we demand of political office aspirants to give us answers to these questions and how they intend to tackle these problems because soon, we will not have any national cake to share again. We need to reduce our sole reliance on crude, build a competitive power sector thereby encouraging growth of local industries and attracting investors. We (the citizens) should try to show more interest in the affairs of our dear country.
And this is why I ask the question: Will the Nigerian government be able to pay salaries next year? And many Nigerians do not understand that this is a dire situation. It is not only salaries, there’s already been calls for downward review of 2015 budget; it will affect roads maintenance, healthcare, education, finance and all sectors as a whole. The embargo on Iran will soon be lifted, causing more crude oil to flood the market and further crash prices. But nobody is discussing this, rather we would rather discuss which political party will win the next election and how it will favour one geopolitical zone or a particular group of people while inflation continues rising.
Hwaiting your thoughts and comments
P.S: I would only commend our honourable representatives the day they scale the fence and gate because they were locked out while trying to vote for the downgrade of their allowances…#Justsaying