by Kolawole Omole
I think as Nigerians, we have to be honest with ourselves about the true state of our economy. President Buhari met an economy that was already in comatose. Civil servants were owed salaries, Federal Government was indebted to petroleum marketers, power supply was epileptic, North East was ravaged by insecurity and the policing of our territorial waters had been left to the hands of those that were never envisaged by the Constitution of the land. A lot of things had gone wrong to a level no one can ever imagine until staggering cases of maladministration and corruption were unravelled.
Buhari’s emergence coincided with the over supply of crude oil into the global market as a result of shale oil revolution in the United States of America and decision of Saudi Arabia to protect market share by increasing supply which left oil price lower for longer at about $32. This, of course led to reduced foreign exchange earnings and ultimately, a drastic reduction in monies available for sharing by the Federation.
The problem we are facing today can be attributed to years of inept leadership which neither had foresight nor focus. Thisday, Nigeria cannot boast of efficient refineries and our foreign exchange currently stands at $27bn. This is unacceptable for a country who is the largest producer of oil and gas on the African Continent.
We have got only $27bn in foreign reserve, $2.2bn in Excess Crude Account and slightly above $1bn in Sovereign Wealth Fund while some oil and gas countries have hundreds of dollars in reserve with modern day infrastructure and social services.
The true state of our economy is that Nigeria is expected to produce 2.2million barrels of oil in 2016 though that has reduced considerably due to pipeline vandalism and production disruptions in the Niger Delta, but at that; the Federation which comprises of the 3-tiers of government is entitled to about 60% of total production due to Joint Venture agreement. Nigeria will fund cash calls and the remaining will be shared. Therefore in 2016, Federal Government has projected an oil revenue of N860bn.
In total, Federal Government projected a revenue of N3.8tr for 2016 out of which N1.4tr will be used for debt servicing and salaries to the tune of N165bn will be paid every month. You can now start to understand that we are simply borrowing to feed our political elite fat and the exorbitant life they live is simply fake. The payers of the fakeness are the millions of visibly poor Nigerians and creditors- local and foreign to whom Nigeria owes trillions of Naira.
For those who are gleefully calling for strike action, I advice them to have a rethink. The cost of subsidizing a litre of PMS when a barrel of crude is slightly above $40 a barrel is not so much but deregulation was a tough decision taken to conserve our fast depleting foreign exchange, introduce transparency and competition to the sector and boost employment.
The callers of strike knows fully well we can not transact international trade with our local Naira and do know how inglorious it would be for a sovereign country like ours to run out of dollars. Labour unions should simply join hands with President Buhari in repositioning a country that had been badly governed for years, concertedly assist in exposing and recovering stolen funds and Nigeria will be better for it.
It is important to note that the Buhari-led government is not anti-people. The orientation of the Federal Government remains pro-poor and has made provisions for palliatives to the tune of N500bn in the 2016 budget. The palliatives which would be delivered as part of the social intervention policy of the government will lift millions out of poverty and promote inclusive growth.
Strike is not an answer but will only stymie the little progress that has been made.
God bless Nigeria!
Op–ed pieces and contributions are the opinions of the writers only and do not represent the opinions of Y!/YNaija
Kolawole Omole is a public policy analyst