By Dele Sobowale
“Unsold Nigeria crude grows as buyer interest falls”. PUNCH, Thursday, April 9, 2015, p 41. The story by Femi Asu, went on to state that “Weak buying from Asia and other regular buyers of Nigerian crude oil has left a large overhang of March, April and May cargoes, it was learnt”.
For those who might not fully understand the implications of that report, it is necessary to spell them out. The first casualty, and it has been in that position since last year, is the 2015 budget which is now nothing more than an academic exercise.
With crude oil prices hovering between US$45 and US$60 per barrel, the budget which out-going Finance Minister first based on $78 per barrel crude oil price, had by February been dropped in the dust bin.
Now, with volume supplied imperiled by weak demand from our traditional customers, it is obvious that the Age of Crude is surely over in Nigeria – at least for a while.
Incidentally, this is not the first time this will be announced on these pages. In an article published in December last year, titled THE AGE OF OIL IS OVER FOR NIGERIA, the point had been made that the forces which had driven the global price of crude oil to the low levels it reached then and also reduced the demand for Nigerian crude are not only long-term in nature, but they were then just gathering momentum.
The news report above only points to the major economic crisis facing the nation – starting immediately. By the time President Jonathan hands over the leadership of Nigeria to Buhari, the country would have once again been classified as a near bankrupt economy. Our earnings from crude oil will just about be sufficient to pay for all the foreign loans taken by the Federal and state governments.
For Buhari and Nigeria, lightening has struck twice in a life time. By the time he was propelled to the Head of the military junta in December 1983, Second Republic politicians, at Federal and state levels had frittered away the first crude oil bonanza and left Nigeria with a huge debt which later became our debt trap.
By October 1985, President Babangida, who toppled Buhari, was already lamenting that, “It is true that we have run through one of the greatest financial bonanzas that ever happened to a nation in need; so fast and so recklessly that we may wonder if ever happened at all!”
The harsh measures which Buhari took, which should have produced salutary effect, were denounced by the same Nigerians who had been impoverished. Today, as we approach a democratic change of government, we can surely repeat what Babagida said about the bonanza which Second Republic politicians wasted.
From 1999 till date, politicians representing all the political parties have once again run through another bonanza more recklessly than in the 1980s. Buhari, once again is fated to inherit a national purse totally depleted by sixteen years of Obasanjo, Yar’Adua and Jonathan, at the centre.
State governors, especially those newly elected, will also find themselves wishing they never ran for office. Even those who are continuing in office face a massive revolt of public servants and the Nigerian populace as they will increasingly fail to fulfill their election promises.
So, the second casualties of the impending economic doom are the public servants. Even states which struggled to pay salaries before the elections will now start defaulting in payments. Governors going on May 29, 2015, will simply abscond from their states and leave their successors to face the outrage of public servants.
Unpaid contractors constitute the third set of victims of the change in the fortunes of Nigeria. It is almost certain that any contractor, still unpaid by any government — Federal, State or Local – and who is not well-connected with the President, Governor or Chairman, can forget about being paid for a long time to come.
The in-coming governments, cash strapped meet current obligations, and having failed to receive the kick-backs from over-inflated contracts will not be in a hurry to pay past debts. The great wave of defections from PDP
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