NIGERIANS AND THE EFFECT OF FALLING OIL PRICES

Since oil prices took a dip some months ago economies across the world have been adjusting their spending to cushion the effect on the citizenry. According to Ikenna Ifedobi, a Consultant Economist with the American Petroleum Institute, Nigeria anchored her 2014 budget at US $77.50 per barrel of oil with an estimated 2.39 million barrels a day but the actual production fell to approximately 2.25 million barrels a day due to activities of oil vandals. Excess crude account also fell from an estimated 9 billion naira to 4.1 billion. Worse still, Nigeria is removed from the list of countries selling oil to the United States (US), further reducing our revenue. Besides, US also has Shale oil which makes her less dependent on external oil. This is happening to a country whose economy is over 90% dependent on oil. It is then clear why the Coordinating Minister of Nigeria’s Economy, Dr Ngozi Okonjo-Iweala, repeatedly tells Nigerians that 2015 will be a difficult year. She leaves some hope though that the difficulty would be overcome.

This reality is not peculiar to Nigeria. Mexico’s 2015 budget was based on an oil price of US $79 per barrel, but

following the glut, Mexican crude fell to only a little above US $40 per barrel as at Jan 30, 2015. Consequently the country had to cut its year’s budget by $8.3 billion, and cancel a high speed train project that was to gulp $3.7 billion. These measures, the Finance Minister, Luis Videgaray, said are to generate public confidence in the leaders’ management of the economy in a time of economic crisis.

Nigeria’s present administration is doing everything possible to diversify the economy. It is moving away from mostly depending on oil, to other areas that can generate revenue for the country. The revolution in agriculture is noteworthy. Local production of rice is rising while the importation of same commodity is falling thereby conserving scarce foreign exchange. The President promises to revive the Ajaokuta Steel project and revive mining as other ways of looking inward. Along with this is the promise to cut down on the cost of governance, a step which Burkinabe leaders recently took. Government has taken a step to reduce the prices of petroleum products, especially petrol which is pegged at N87 per litre, though many retailers are yet to comply.

We all have a duty to cooperate with government in its effort to steer the ship of State out of this troubled waters. It is important we cut cost in almost everything. This should be in all sectors and segments of national life. Let us put a brake on the agitations for personal or group gains. There is time for everything. As we rallied as a people irrespective of our multifaceted differences to rout Ebola from our land, let us do same again in this difficult time. We will come out stronger and better as a people. May God bless Nigeria, and guide us all in the onerous task of nation building. Peace be with you!