IT is obvious the Nigerian economy is in a precarious situation. It is really nothing new. The only thing that could be new is the momentum of oil theft, which combining with corruption, is drying up resources available to governments.
Nigerians do not need a warning from the World Bank to know that an economy founded on only one product is doomed. Years of contemplating what to do with the economy has not thrown up solutions that governments are willing to implement. Every government is interested in getting resources it immediately needs for its projects, most of which are short term programmes.
A World Bank’s Nigeria Economic Report for May 2013, noted that, “Despite the recovery in oil prices, Nigeria expanded its fiscal stimulus significantly, increasing consolidated spending by an estimated 2.5 per cent of Gross Domestic Product, GDP, and drawing down the remaining balance of the Excess Crude Account at the same time that many other oil exporters were building back their reserves.”
What the World Bank is looking at is different from the needs of Nigerians. While the bank is concerned with the ability of Nigeria to meet its international obligations, Nigerians are worried that the country has no plans to create an economy away from oil. All the talks about diversifying the economy, some dating more than 40 years, have remained mere talks.
The saddest aspect of the patch Nigeria is passing through is that once oil revenues climb to levels that can fund the 2013 budget, all those responsible for the economy would happily return to their spending sprees.
Oil accounting for 95 per cent of exports and 75 per cent of consolidated budgetary revenues in Nigeria, is a bigger danger than the volatility of oil prices and thieves who are exploiting weaknesses in the oil production chain.
Those celebrating the assistance Europe is promising to end oil theft are missing the point again. The West’s interests are served by stable oil prices. A stable Nigerian economy, with a broad manufacturing base to serve Nigerians would not benefit from the West’s help which wants Nigeria to be a net importer.
Nigerian authorities should be planning an economy above oil thefts. The only way that would be possible is by diversifying the economy. Oil would still be useful by providing the resources to redirect the economy.
The current practice of consuming all the money the country makes each budget season is another version of oil theft. Indifference to the future is new slavery awaiting Nigerians. Our governments owe us a responsibility to rescue Nigerians from that blight instead of rejoicing that Europe would help it maintain the endless dependence on oil.