Let the oil well run dry by YungNanas
Devaluation is just the beginning of further fall. When a bucket has been leaking at a rate of more than 25 per cent, to keep the bucket full, one has to diligently keep pouring water at the same level of leakage to maintain fullness or at 26%. Nigeria’s leadership never mastered that simple method of checkmating its finances to plug holes and stabilise its leaks. With Naira devaluation, the economy has lost 8.4%.
May the shock continue to reverberate so the ‘Giant of Africa’ may wake up. Since 1970 when the civil war ended, naive and barely literate Gen. Yakubu Gowon announced to the world that Nigeria was/is rich. Nigerians have followed that ‘beer parlour’ chant and chest pounding to their own peril. Nigeria is not a rich nation and was never one – always imagined. By the devaluation from N155 to N168, I predict that before the end of first quarter 2015, Naira exchange rate will be N200 to $1. A friend just got back from a three-country trip to UAE-Bahrain- Qatar, as part of a United States Chamber of Commerce delegation.
The feeling in that region, even if the oil price were to fall below $70/bbl, they can handle it. The difference between that region and Nigeria is that they finance their operations and their liquidity per capita is very high. It is a cushion that affords them the opportunity to move on and wait for correction. In the case of Nigeria, with a population of 165 million, about four times the entire Gulf Cooperation Council’s regional population, the stress and shock with falling oil price will be devastating.
It is amazing that with Nigeria’s Finance Minister, Madam Okonjo-Iweala, famed former World Bank top executive and her handpicked followers and admirers in the nation’s monetary and fiscal echelon, there are no apparent gains as a result of her superior knowledge; should I say imagined superior knowledge.
There are never enough reserves in Nigeria to cushion an oil price swing. With undue reliance and echoed sentiments that Nigeria is rich because it is an oil producing nation, many unduly abandoned other sectors. How can a bunch of CLOWNS in leadership who can barely read and understand financial structure safeguard an economy as fluid as Nigeria’s? Their dance is about how much money they take home, milking the system. I keep hoping that the oil price falls below $50/pbbl, so that Nigeria drinks her oil and may be forced to look inwards to adjust its ways and become productive. Texas witnessed that in the late 1970s and 80s, and now Texas is the United States’ most stable and viable economy.
In Texas, we do not celebrate oil but use it to oil our way to productivity and prominence – a diversified economy. Given that the United States is now a net exporter , we love it because our gasoline price is dropping – adding more spending money to our purses. We want it further down. As U.S no longer buys Nigerian crude, I hope they stay away from that and hopefully, Chevron and ExxonMobil will divest their holdings and Shell pulls back. Nigeria needs critical shock treatment so that it may wake up and smell the rotten manner it has been handling its natural resources.
Also, when the crude oil flow drops to a trickle, the Niger Delta will face environmental challenges that in 100 years, they will still be suffering what they have allowed to happen. Nigeria will be the worst hit because of inadequate planning, corruption, over-dependence on the importation of refined petroleum products and a poor federal system of government, where other federating units depend mainly on the central government for monthly allocation. If Jonathan makes it in 2015, Madam Okonjo-Iweala and Petroleum Minister Diezani Alison-Madueke should be FIRED. The two have not delivered solutions to make Nigeria’s economy hum or gain traction.
They have instead sold naive and almost illiterate House and Senate members, including their admirer President Jonathan VOO-DOO numbers. The Naira has been losing value and becoming a worthless currency, and that flies in the face that 30 years ago, N1 million was nearly $2m. Today, same N1m is worth less than $6,000.
Anyone who believes that such a loss in value is proof of ‘Nigeria as the Rising and Biggest Economy in Africa,’ may very well believe that Nigeria is the richest country in the world. That too, is allowed.
By Yungnanas
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