Crude Oil Price Crash and the Diversification of the Economy


Jide Ayobolu



President Muhammadu Buhari has already diversified the Nigerian economy, Minister of Information and Culture, Lai Mohammed, has claimed. He pointed to Nigeria’s exiting of recession as proof that some other critical sectors like agriculture and mining were now contributing significantly to the economic base of the nation. Mohammed claimed Nigeria exited recession not because of the rise of crude price in the international market, but the contribution of the mining and the agriculture sectors to the economy as managed by the Buhari administration. The minister said this recently when he received a delegation of permanent secretaries led by Winfred Oyo-Ita, Head of Service of the Federation.  “Frankly speaking we cannot repair the damage that has been done in over 16 years in three years. “We have diversified the economy, we went out of recession not because of the increase in the price of crude but because of agriculture and mining, these are things you need to share regularly if not they will accuse you because you are the government,” Mohammed said.


The Buhari led government has been working round the clock to ensure that the suffering of Nigerians are assuaged and ameliorated, by laying a solid foundation for a greater and better tomorrow. The campaign of calumny against the government of President Buhari has been largely predicated on ethnicity and tribal particularism as well as politics of vendetta, especially by the opposition party that roundly defeated at the polls after many years of misrule, bad governance and monumental fraud. The other point which cannot be waved aside is the fact that, one of the cardinal policies of this administration is the war against corruption, and since this government came on board, never like before, it has consistently waged relentless war against graft in the country; and the high and mighty are not spared; now in a surreptitious manner, corruption is fighting back in a very dirty and desperate manner. It is germane to observe and rightly so that, since the present administration came on board under the leadership and watch of President Muhammadu Buhari, the president and his team has worked relentlessly to bail out the economy from the recession in which it is presently enmeshed, an economic situation which is self-inflicted as a result of bad governance, mismanagement, corruption and apparent lack of accountability of past leaders in the country. They dissipated the scarce financial resources of the country on conspicuous consumption as well as hedonistic and epicurean lifestyles; and refused to save for the raining day.


It is this multifaceted errors of the past that the present government is trying to put right, unfortunately, the present government has been severally criticized by those who created the economic challenges in the first place, particularly members of the past administration, who mercilessly plunder and pillage the resources of the country on selfish individual desires, thereby neglecting vast majority of the people. As the government is working hard to resolve the fundamental economic contradictions with the economy, people who have illegitimately enriched themselves by pilfering the national treasury and are presently undergoing trails, are clandestinely sponsoring violence against the Nigerian state and painting the country black in both local and international media.


This is contrary to some spurious and erroneous claims in some quarters that this government is idle and doing nothing about the socio-economic miasma in which the country is presently enmeshed, unfortunately this unfounded and baseless claim is gaining currency because of the hardship Nigerians are presently going through. Those who created these problems are now behaving like the much needed messiah to rescue the country from this crisis, but what did they do for the country and they people in the last 16 years? The gang-up and conspiracy against the Buhari led government is because of the anti-corruption crusade of the present administration, hence, their inability to make cheap money and fleece the country of funds needed for development. Undoubtedly, this government is working hard and even world leaders know this fact, hence the need for all Nigerians to rally round the government and move the country forward; and stop the issue of violence, blackmail, vendetta, corruption and anything that can inhibit growth and development in the polity.


It would be recalled that, the immediate past President Barrack Obama of the US said, his government has confidence in the administration of President Muhammadu Buhari, the US leader said this during a bilateral meeting on the sidelines of the 71st edition of the UN General Assembly. Obama described Buhari as a man of “integrity and honesty,” and said his administration would assist Nigeria within the short period it has left. The 44th president of the US will be bowing out of office in January after serving two terms. “We have confidence in your leadership. There are some difficulties you face, but this administration is willing to assist in the short time we have left,” “You have made real progress in defeating the brutal organization called Boko Haram, and that was achieved because of your leadership.” Obama also offered a hand of fellowship to Nigeria “in the final and comprehensive defeat of Boko Haram, resolution of the Niger Delta crisis, which would help ramp up oil production and increase revenue, resolving the humanitarian crisis in the North East, recovering stolen money, and revamping the economy”. He described Nigeria as a big and important country in sub-Saharan Africa, and said his country looked forward to a framework for sustained partnership between the two nations. Earlier, Buhari assured Obama of the progress of his administration, and the efforts being taken towards resolving the economic crisis. And, President Donald Trump has said that much too.


In a same vein, Mr. Ban Ki Moon, former United Nations Secretary General not-too-long-ago congratulated President Muhammadu Buhari on the anti-corruption war. Ki-Moon declared: “You are highly respected by world leaders, including myself. Your persona has given your country a positive image.”


It is important to note that, the former minister of agriculture and now the President of African Development Bank (ADB), Dr. Akinwumi Adesina lamented that, Nigeria used to spend over N356 billion yearly on the importation of rice, similarly, Nigeria spends over N100 billion annually to import fish. And, the country spends N1.6 trillion on the importation of wheat, sugar, rice and fish on a yearly basis. The former minister also regretted that, Nigeria has the third absolute number of stunted children in the world with 41 per cent of children under age of five stunted, 23 per cent under-weight and 14 per cent wasted. Also, he said, Nigeria’s import and export ratio has remained at 92 per cent import and 8 per dent export. It for this reason that President Buhari said an economic retreat, as it relates to agriculture that, it has been neglected over the years, and veritable government intervention is required in the crucial sector, that if carefully managed, can lead to self-sufficiency in food production, solve the problem of mass unemployment, increase the country’s foreign earnings, and grow our per capita income. In his words, he stated that, “for too long government policies on agriculture have been half-hearted, suffering from inconsistencies. Yet our real wealth is in farming, livestock, hatcheries, fishery, horticulture and forestry”. He further explained the some of the challenges in the sector, such as rising cost of food, lack of agricultural inputs at affordable prices, high cost of fertilizers, pesticides and labour compound the problem of extension services, import of food items that can be easily produced locally, wastages because of the absence of adequate storage facilities as well as lack of feeder rods to transport foods produced in rural areas to urban centres, just to mention but a few of the difficulties encountered in the sector. He also said that, in solving the problem the public must be carried along and educated about the plans of government so that, they can key into it and benefit maximally from it, in addition, he reasoned that, there must be close working relationship between the federal government and the state governments, to really boost agriculture and solve some of the problems in the sector, for example, the massive availability of feeder roads to make transportation of food from the country-sides to the city centers less cumbersome, there should also be the availability of soft loans to farmers with the CBN bearing some of the risk as well as the exigent need intermittent stakeholders meeting on how to move the sector forward. There is no doubting the fact that the narrative has changed for the better under the present administration.


Agriculture in Nigeria is one area that can turn the fortunes, destiny, direction and dynamics of this great country around for the very best with the shortest space of time. It is also important to note that, President Buhari has said that the Federal Government is making efforts to ensure that Agriculture becomes more attractive to foreign investors. He made this assurance while speaking on the theme of the 8th annual Bola Tinubu Colloquium “Agriculture, work and revolution” at the International Conference Centre, ICC, Abuja. The President, who chaired the event stated that there were many opportunities in the agricultural sector and expressed his disappointment at the fact that food is imported into the country rather than being exported. According to the president, “Nearly all our crop-based farming activities are dependent on rain-fed agriculture, and this makes our agricultural productivity entirely vulnerable to the effects of climate change. In the past few years, on the average, we have spent in excess of $11bn annually importing wheat, rice, sugar and fish. We need not, and indeed we cannot afford to continue on this trajectory”. He added, “Agriculture is the key to our economic growth and social investment policies. Our administration’s key strategy is to ensure that Nigeria becomes self- sufficient in the foods that we consume the most. Maize, rice, corn, millets, fruits, poultry products and their derivatives can all be produced at home if we put our hearts into it. Our policy is simple: We will produce what we eat! It is not only logical, it is necessary.” He then implored everyone to work together thus: “I am declaring that we need a new approach that challenges more states and local governments, more organizations, companies and non-governmental organizations and individuals, some of the younger people, who are here to step up and play a role because government cannot and should not do it alone. All hands should be on deck.” Also, the federal government approved the implementation of the “Green Alternative’’, a road map towards diversifying Nigeria’s economy. And, government has gone ahead to really develop the agriculture and meeting up with the set objectives.


Besides, the federal government has allayed fears of an economic crisis in view of the effects of the crash in global oil prices and the Coronavirus epidemic on the nation’s economy. Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, called on Nigerians not to panic as the drastic fall in global oil price threatens the country’s 2020 budget as well as its macroeconomic stability. She gave the assurance just as the Central Bank of Bank of Nigeria (CBN) Governor, Mr. Godwin Emefiele, said the CBN had already embarked on measures to significantly reduce lending rates, which have resulted in total banking credit rising to over N17.4 trillion as of January. Also, the Group Managing Director, Nigeria National Petroleum Corporation (NNPC), Mallam Mele Kyari, has expressed the corporation’s readiness to strategically put in place measures that would reduce the cost of crude oil production in Nigeria to create a market for Nigeria’s crude and make the country a choice destination for Foreign Direct Investment (FDI).