The Nigerian Oil for Cash Program 

By

Ikenna O. Ezenekwe

iezenekwe@hotmail.com

Recently a blogger [Ezekiel Nwakwue] of the Igbo Organization forum - IgboOrgNYForum@yahoogroups.com in response to the News that Nigeria produced 75.95 million barrels of oil in May 2005 stated that "the problem is that Nigerians do not know how many barrels of oil foreign oil companies pump in a day. Nigerian government does not have access to the meters where our oil are kept. We rely on the figures oil companies give to us. In 2003 Shell told Obasanjo's government that Nigeria is losing one million barrels of oil in a day through oil bunkering." And, I could not resist the urge to air my take on this matter.

It is disturbing and trully unfortunate that Nigeria has no real way of ascertaining the number of barrels of oil pumped per day. It would make a good sense for the FG to desire to check the pumping rates themselves especially since that is the only real data that determines the earnings of the nation - 90% of it. If this is indeed true - then I smell a dead rat. But that is besides the point. The point to be made here points straight at the erosive faults in Nigeria's administrative management system and how it has made possible the jubilation over the news of $18 billion debt relief. 

According to stated records, she pumped about 76 million barrels for the month of May. The records showed the cost of each barrel to average about $45 that translates roughly to $3.3 billion for that month. Going by the assumption that each yeilds 50% profit -then $3.3 billion will yeild a net profit of $1.7 billion.  $1.7 billion is not small money - not for a country still in her developmental stages. For the month of June - the price per barrel hovered around and above $55 translating to about $4.2 billion per month assuming the pumping rate remained about the same as the month of May (76 million barrels) applying same assumption puts the net profit at about $2.1 billion. This combines for about $4 billion in net profit for the month of May and June - 61days. 

This is something!  

Some one attempting to defend President Obasanjo's "beggar-posture" and his "African outfit" at the G8 gathering, alluded to Nigeria being too populated and that she has numerous operating cost that quickly eats ups all the profits and that the debt relief was going to do good as it will help to pay for back salaries and pensions and other operating expeditures over the table and under the table. The gentleman [Yoruba man] continued - that he considered Nigeria's income at the oil pump too insignificant to do anything with or affect any change with - that when calculated and translated in terms of per capita it yields numbers that still put us far below any "developed" country. He said that the administrative machine of the Nigeria is fine -that the blame should not go there.  

It was almost if I heard him say that Nigeria 'must' carry on as is without a critical look or overhaul of the soiled Nigerian administrative system - that what is required is more funds or rather more loans or relief loans or loan relieves. If my assestment is correct them something is clinically wrong somewhere. There no doubt Nigeria is currently not in a position to qualify for loans or relief loans or loan relieves - loan relief is analogous to an individual filing for bankruptcy. If he knows that the country will need to give up rights and be mandated to do certain things (disclosed or undisclosed) - just as an individual will have to do - to have their debt relieved, will he still be advocating for the below mediocre performance witnessed in administrating Nigeria. 

Who goes harvesting for yams that they did not plant or nurse? - only a thief! Who is to tell him that China the world giant magnet by her right - has a very low per capita but maintains a trade surplus with America and most other countries she trades with? How is it possible to earn billions of dollars monthly and not be able to curtail "operating expenses" and still launch frontier developments like China or India - without having to take the typical posturing to our ex-colonial masters for loan relief? He must have not understood the logics of trade and survival very well because in order to get a shared balance at the world arena one must first have their house in check.

Nigeria's administrative maladies is squarely where the bottle neck is - and it is where 90+% of the blame lies. It is the reason why Nigeria ranks sixth in oil producing countries while ranking last in education, health, food, and the list goes on. These maladies are the reasons for such borrowing on our part.

The thing is what can be done by the present administration to get the house in order so the administrative machine can run effectively with high efficiency? Not only just that -Is President Obsanjo's team interested in putting the house in order? I have my suspicions that they aren't based on my impartial inclination towards Nigerian ex-military politicians who did not even complete secondary school talk less of attending the four walls of institution of higher learning.

To many the solution points to regionalism. As Ojukwu put it to them at the Aburi gathering back in 1966 - in order  attain good governing efficiency, the regions in Nigeria will need to move further away - to function better as an effective unit. This still holds true till today.  

Long live Nigeria

Ikenna O. Ezenekwe is a Chemical Engineer practicing in NYC - 917 239 7919