The current recession in Nigeria no doubt was instigated by the fall in oil prices. This is because the country is heavily reliant on the Petroleum Industry with 95% of its export revenue obtained from the export of crude oil and accounting for over 80% of Federal Government revenue. However there should be no excuse as to why the economy should sink so low, after all the previous government and governments before that ruled at a time a barrel of oil cost above $110. Do they mean to say the Nigerian government made no plans for rainy days such as these? It’s either they (government officials) naively thought money derived from oil will ‘always’ be present at similar rates or they just could not be bothered so long as they could care for their own if rough times hit – to hell with the rest of us, I suppose.
Recently, the Nigerian government has proffered the sale of National assets as a means of countering the recession. Though this is not such a terribly bad idea, it does highlight the sad fact that the Nigerian government is so lazy and corrupt it would rather shift its burdens and prospective huge profits to one man courageous enough to manage it rather than they – the government – do the hard work they have been appointed to do and provide the public with better services. Before taking such a cowardly step as they have in the past with the Telecomm, Steel and Power industries, there are better options that should be explored.
A study of other states that have been through this same predicament or are presently dealing with it should be done and cues taken from them and applied where suitable. Norway for example is not too bothered about the fall in oil price as they had earlier set up a pension fund boasting $860 billion where oil profits are deposited. What we can learn is that the country spends about 4% from this reserve on investments rather than direct spending. So maybe a little of the money left in our federation account can be invested in other sectors such as Agriculture, Steel and Tourism. Qatar suffered a similar recession in the 80’s and immediately cut down on government expenditure in order to meet lower incomes. Also, they made projections on income reserves, the oil market being the major case study. Government needs to know when our oil fields will deplete and set up measures to protect the country at such a time. If we are brave enough, the country can adopt the style of the Indonesian government and put a ban on exports of unprocessed mineral ores in an attempt to boost the domestic mineral processing industry and encourage exports of higher value added mineral products. So we should be looking to increase the number of our refineries, process crude oil and provide fuel for both local use and export.
Though the effect of these suggested options will not be realised immediately, long term application is sure to provide favourable results for the Nigerian Economy. Our prayer is that the Nigerian government acquire the discipline and courage needed to follow through.