State of the nation

This is a difficult time for Nigeria. Crude oil, on which the country depends for over 80 percent of its revenues and 90 percent of its foreign exchange, has been on a freefall in the international market since mid-2014. As at the last check, the price was $28 per barrel. Meanwhile, the official cost of producing a barrel of oil hovers around $30 per barrel. With the current over-supply of oil, global growth slum, Shale gas revolution, US resumption of oil exports and the re-entry of Iran into the global oil market, speculations continue that the price may continue to slide further to below $20 per barrel.

Curiously, Nigeria’s 2016 budget proposal, still before the National Assembly for consideration, has a budget oil benchmark of $38 per barrel. Not unexpectedly, Nigeria’s currency – the naira – has been badly hit by the declining oil revenues and the attendant scarcity of foreign exchange to sustain our import-dependent economy. Hopes that the new government would quickly put together a formidable economic team to work with the Central Bank of Nigeria (CBN) to fashion out appropriate remedial measures and policies to tackle the slide are fast vanishing.

The CBN, on its part, has been coming up with various policies and measures that have largely generated controversies to protect a beleaguered naira. A particularly tough blow to Nigerians was the stoppage of payments for goods and services abroad with naira-denominated payment cards that had long been taken for granted as one of the features and benefits of globalisation.

Thankfully, the CBN has taken a second look at some of these policies with a view to making forex more accessible to legitimate businesses as well as stabilise the local currency.

On their part, in what appears like a case of slaughtering the geese that lay the golden eggs, Nigeria’s hitherto unimpressive regulatory agencies have gone into overdrive, slamming controversial fines on flourishing foreign businesses in Nigeria, thereby inadvertently sending signals to the international business community that Nigeria is unsafe for business as the government could turn on foreign-owned businesses in times of economic malaise.

However, we must note that the government has been quite impressive in its war against corruption and the insurgency in the North-East of the country. We are at pains, however, to point out that from the way the government is carrying on, it appears those two – war against corruption and the Boko Haram insurgency – are its two sole programmes and nothing more.  Sadly, as it is becoming obvious by the day, ending corruption in Nigeria will not result to an end in poverty, hunger and infrastructure deficit or lead to economic growth and development. These are even more important goals that the government needs to prioritise and for which it appears to have no plans.

We call on the government to prioritise the economy and empower competent Nigerians to fashion out comprehensive policy options and strategies for the country to surmount its present challenges and launch itself onto the path of sustainable growth and development.