Although successive administrations had reiterated the need for, and announced policies to diversify the economy with the principal objective of significantly reducing Nigeria’s unhealthy dependence on crude oil exports for over 90 per cent of her revenue earnings, the dangerously precarious nature of the situation is becoming more evident by the day. According to a report by the Nigerian National Petroleum Corporation (NNPC), the country’s total revenue from export of crude oil fell by 98 per cent in April, compared to the figures for March. The agency reported that while the country generated N35.72 billion from crude oil exports in March, this dropped drastically to N723 million in April. Largely as a result of the effects of the coronavirus pandemic, Nigeria’s crude oil export has dropped substantially since the outbreak of the global health crisis, such that the amount of the commodity the NNPC lifted dropped from 10.79 billion barrels in February 2021 to 7.62 billion barrels in March, and of this, 66.67 million barrels were exported.
According to the NNPC, “The sum of N61.97 billion was deducted out of the total March value shortfall of N111.97 billion. This is to make funds available for Joint Venture cost recovery to sustain the existing production level. The balance of N50 billion will be deducted in subsequent months”. Giving an indication that the various levels of government will be faced with further severe liquidity constraints in the immediate future, the NNPC stated that “In addition, April value shortfall of N126.29 billion is to be deducted from May federation proceeds in June 2021 FAAC meeting”. A fiscal emergency long foretold is clearly now on our hands.
To its credit, the President Muhammadu Buhari administration has taken bold and concrete steps since its inception to diversify the economy, particularly through the aggressive promotion of increased agricultural productivity to reduce food import dependency and ensure more efficient utilisation of scarce foreign exchange earnings. However, it is obvious that the challenge of boosting alternative revenue sources and plugging avenues of waste and resource leakage, which remain substantial, has become more important than ever. Already, most state governments are unable to pay the national minimum wage and those who have not already begun to retrench public sector workers have given an indication of plans to do so.
The country’s mounting and existentially threatening security challenges across all the geo-political zones require the allocation of substantial resources, which will have further negative implications for appropriate investment in health, education, shelter, poverty alleviation and job creation, all critical to human capital development, economic recovery and sustainable growth. To compound matters, experts have expressed concern at our substantially increased borrowing levels, warning about the real possibility of a relapse to debt peonage. It is all too obvious that it cannot continue to be business as usual if the country is not to court indescribable economic disaster.
As the National Assembly scales up its efforts to effect the much advocated constitutional amendments to remedy the several identified flaws in the current 1999 Constitution, therefore, it has become imperative to give priority to measures aimed at drastically reducing the cost of governance at all levels. In this regard, the legislature can no longer exhibit insensitivity and indifference to the need to drastically cut down on its outrageous allowances and other perks which have become an albatross on the embattled economy. This is in addition to the need to reduce the number of political appointees at the federal, state and local governments, as well as the size of their emoluments.
Again, we cannot continue to ignore the urgent need to ensure that states control and exploit the mineral resources within their jurisdiction so that the economic potentials of these commodities can be tapped and the aggregate wealth of the country substantially enhanced for the benefit of all. In a similar vein, things which we have either only paid lip service to or treated as unimportant, such as the size of the presidential fleet of aircraft, the number of vehicles in the convoy of governors and other public officials or the wasteful expenditure on travels by public officials even for business that can be conducted with the aid of modern information technology must now be put on the front burner of public discourse for urgent remediation policies.
No less critical is the need for the administration to more determinedly walk its talk as regards the anti-corruption war that constitutes a major plank of its electoral pact with the people. While it deserves commendation for bringing the corruption menace to the forefront of public consciousness, the administration can do much more to strengthen the criminal justice administration system to more swiftly detect and punish acts of corruption as well as retrieve stolen funds back into the public coffers. At the same time, significant improvement can still be made in enhancing the level of transparency, efficiency and prudence in the management of scarce public resources.
As we find ourselves in a situation difficult to distinguish from an economic emergency, Nigeria cannot continue to be the destination for all kinds of imported products, including those that are dispensable luxuries or can be produced locally. Government must therefore intensify the campaign to get Nigerians to patronise products made in the country, boost local productivity, create jobs for our teeming youth population and significantly reduce the pressure on foreign exchange allocation.