By Dele Sobowale
Late British Prime Minister, Harold Wilson, 1916-1995, was the first to pronounce that “a week in politics is a long time.”
That was long before the world became a smaller global village on account of the internet.
Today, any significant event occurring in any nation on earth is known all over the world within minutes. The major international networks – ALJAZEERA, BBC and CNN – were broadcasting the news of the murder of Deborah in Sokoto less than three hours after the mob murder occurred. Nobody needs to be told the image of Nigeria painted by that incident; especially, when it was placed side by side with the report of another attack on the Catholic Bishop’ s Court in the same city. Federal Government officials who had done a good job convincing the US authorities that Christians were not under siege in Nigeria now watched helplessly as their work was being undone in less than six weeks.
A year is also now a long time in the economic prospects of any country. Decisions made or not made; investments made or not made today in any economy will have repercussions for the people for years to come – for good or ill. The mayhem in Sokoto serves as an appropriate point of departure for the discussion of our country’s economic prospects. Nigerians might not realize it, that incident could not have occurred at a worse time for us.
Globally, the Russia-Ukraine war is already causing a lot of economic re-alignment of business partners and investment/divestment decisions. It is now certain that most of Europe will reduce its trade with Russia and turn their attention to other oil and gas producers. The only oil and gas producer that might not benefit from the economic reversal of alliances is Nigeria. Investors moving away from Russia would not be so rash as to head for a nation experiencing heightened insecurity as Nigeria has become.
Furthermore, many of the long term agreements will be signed within the next one year. Three factors stand against our country right now; and none will disappear in less than a year.
First, we have an out-going government which nevertheless has until May 29, 2023 to go. Investors almost never deal with lame duck governments where long term projects are concerned. Deals would have been completed with other nations by the time a new Nigerian government takes over. Second, to the best of my knowledge, the Buhari administration has not established a study group to look into the worldwide consequences of the war; how it will affect us and to advise the FG on how our country will escape being a major victim of the Putin War. Third, Nigerians and our leaders appear not to be concerned about the gradual descent into economic anarchy, such as Sri Lanka is experiencing, which will make the other causes of unrest worse nationally. The announcement made by some Elder statesmen to the effect that there might be no Election in 2023 contains economic dimensions which nobody is addressing. Let me point to one example of opportunity which might be eluding us.
NIGERIA AIR AS METAPHOR FOR LOST OPPORTUNITIES
“Procrastination is the grave in which opportunity is buried.” Brewer Stock
An Expression of Interest public announcement was published a few days ago by the Federal Ministry of Aviation with regard to the national flag carrier. As an unrepentant advocate of a national carrier, who watched helplessly as time ran out on the project, it was obvious to me that no foreigner would consider the investment now. Even the most interested would rather wait to deal with a new government – if that government is still keen on Nigeria Air. The thousands of jobs that would have been created, the foreign exchange earned and the skills acquisition are now probably lost for good; or delayed much longer. The Buhari government has also missed out on leaving a legacy. We all lose.
MISMANAGED OIL AND GAS RESOURCES
“Saudi ARAMCOM becomes world’s most valuable company; worth $2.42 trn.”
When both CNN and BBC reported this feat on the same day, I was happy for the Saudis and sorry for my country Nigeria. Saudi Arabia, despite being the largest exporter of crude oil in the world, has managed to achieve three objectives which have eluded Nigeria since oil was discovered in the two countries. One, it very quickly ensured that its oil sector was insulated from nepotism which accompanies all political systems – from feudalism to autocracy and democracy. Corruption was minimized and severely punished. Only the brightest and the best people served to manage its divinely provided “golden egg”. Nobody will ever be allowed to crack it; not to talk of breaking it.
By contrast, Nigeria’s NNPC has been a national disgrace. At one time the Nigerian Minister of Petroleum Products was a School Certificate holder; in a country where there were already several world class petroleum engineers. Furthermore, the organization, right from the start, had been a cesspool of corruption. Successive Nigerian leaders and their cabals had treated the NNPC as their own Automatic Teller Machine, ATM. It remains that way till today.
I recently printed out the Auditor General’s report for 2019; which is the latest available. NNPC was, by far, the most indicted government agency. It had the worst record among all the Ministries, Departments and Agencies, MDAs of government. And, its Directors acted with impunity. Undoubtedly, given the history of NNPC, if Nigeria had been blessed with the Saudi’s oil reserves, we might still be languishing in poverty today. As it is, NNPC will never become the most valuable company even in Africa – given the people in charge.
Two, Saudi has ensured that oil is not only produced and exported to the limit permitted by the Organisation of Petroleum Exporting Countries, OPEC, they have installed enough refining capacity to supply all the needs of the people. By contrast, Nigeria now is unable to meet its own quota – on account of few operational rigs and crude oil theft. More disturbingly, we now import every single drop of finished petroleum products. And now, we pay more to import finished goods than what we earn from exports.
Three, in addition to finished petroleum products, Saudi Arabia is supplied with all the other derivatives from crude refining which Nigeria must buy. We have achieved these awful results by allowing something which an American friend and observer called “lunatic” to happen. We have allowed four refineries owned by the NNPC to stay idle for years. They contribute nothing; they guzzle billions.
I know you have heard or read most of these before. But, what you might not have read or heard before is what makes the economic future of Nigeria so bleak; as long as we continue to place our golden egg in the hands of leaders such as we have now. The same American friend who invests in oil and gas disclosed to me that no foreigner will ever build a refinery in Nigeria as long as we continue to demonstrate to them that we don’t want one. We prefer to import. The implications of that statement are grave. Without realizing it, Nigeria will be faced with a monopoly when the Dangote Refinery is completed. But, we all know that any monopoly, however benevolent, can never work in the public interest. That is the verdict of history; which we ignore at our peril.
Obviously, we have messed up our opportunity with crude oil and the way all our governments since Gowon have managed it. Buhari will leave NNPC next year worse than he found it because he and the managers of the sector have no clue regarding what to do next. The next generation of Nigerians will also join this generation as citizens of an oil producing nation living in abject poverty.
This nonsense cannot continue much longer. Mark my words.