By Dele Sobowale

“The sky is falling…..

“US set to ship First Supply of Shale Gas Oil to the UK”, LEADERSHIP, May 15, 2015, p. 1.

Your Excellency, Mr.President, it does not matter anymore who wins the 20I5 elections. Nigeria at that time will need a leader who can manage widespread poverty at the Federal level and state governors, unlike the wastrels we now have, running the show. By 2015, Nigeria’s crude oil exports and earnings will be far less than what we realize now.

That fact, apart from driving another nail into the coffin of the Vision 20:2020 proponents, portends grave consequences for you personally. Don’t expect Dr Ngozi Okonjo-Iweala or Dr Usman to tell you the truth on this matter. Ministers always operate on the principle that the bearer of bad news is bad news himself or herself.

So operating on the principle of self-preservation, they always tell the President what would make him happy rather than what he must know. Based on the second quotation referred to above, even a freshman economics student at MIT knows that Nigeria’s oil exports to the USA, our biggest customer, will certainly continue, hereafter, to decline. Fur
thermore, with the US becoming an oil exporter in the near future, Nigeria is facing its most formidable competitor.

The report was only surprising to me in two respects. First, it was carried on the front page only by LEADERSHIP and not all the newspapers in Nigeria. Not even the current problem with Boko Haram and government’s response to it can possibly have a more catastrophic impact on Nigeria than the prospective decline in crude oil prices and our exports.

If the 2013 budget is already experiencing problems, the 2014 budget will most certainly result in a major economic breakdown at all levels of government. My fear is that Dr Okonjo-Iweala might not have told the President and her colleagues these unpleasant truths.

Second, prior to the announcement of the agreement to ship shale oil from America to the UK, there had been a CNN report to the effect that domestic oil production in the US was increasing. The report even hinted that in about ten years America might stop importing crude oil.

Given Jonathan’s pre-occupation with the insurgency in the North, and the 2015 elections, nobody can fault him for not paying attention to a report which has all but doomed the Nigerian nation to economic recession on a scale unprecedented in our history.

If the worst case scenario occurs, it will not matter much if government overcomes Boko Haram; a national breakdown of law and order will overshadow everything else – unless Jonathan sets up a task force to develop a plan for governing Nigeria with crude selling at $70 per barrel or less.

Obviously, neither Jonathan nor the governors can afford to maintain the over-bloated executive branches they have established.  Those operating with “State-owned” aircrafts will certainly have to give them up; because it will be difficult to imagine a governor indulging in such vain-glory, which never made sense, when salaries have not been paid for months even after downsizing the civil service.

The first option for governments faced with this sort of economic debacle is devaluation of the currency; which brings in its wake hyper-inflation, more retrenchment in an economy be-devilled with high unemployment and a definite rise in the misery index – defined as worsening social welfare. Nigerians who thought they have seen the worst, economically, will find that there is no bottom to the pit  of hell. The issue is; has Dr Okonjo-Iweala told the President about these possibilities?

In July 2011, in a column titled WELCOME DR OKONJO-IWEALA; I ADMIRE YOUR COURGAE, I warned the former World Bank top executive that she was risking what would have been a respected legacy by returning to her old office. Specifically, I pointed out that debt repayment, despite the controversies surrounding it, was a tangible achievement.

In 2011, she had been brought in to push through an unpopular agenda –fuel subsidy removal. She was advised to return to the World Bank if that was going to be her first item on the economic agenda. Of course, she ignored the advice and she has been struggling ever since the shocking introduction of N141 per litre fuel (later reduced to N97 per litre) on January 1, 2012.

Even SURE-P is now becoming an embarrassment to her and the government and now this.