10 options Nigeria should be considering if this coronavirus forces crude oil prices to collapse to say $10 a barrel

By Ayo Akinfe

(1) Our 2020 budget of $28bn is predicated on selling 2m barrels of oil a day at $60 a barrel. If prices collapse to $10 a barrel as they did during the Shagari and Babangida regimes, it simply means that government revenue and spending will also have to drop accordingly

(2) I suspect that the easy option that the government will go for is to simply cut its budget to $5bn. How this will be implementable when our population is growing by 2.6% a year is beyond me. We also have a lot more projects that require funding, so I do not see how it will be feasible to introduce these cutbacks without major upheaval

(3) To make matters worse, with falling oil demand, Opec is likely to ask for more production cuts. Nigeria could end up with a quota of 1m barrels a day, selling at $10 a barrel

(4) In an ideal world the government would look for alternative revenue sources to plug the gap but alas, the Nigerian economy simply does not have that capacity. So now, the government needs to treat diversification as a matter of utmost urgency. Kind of like the way the coronavirus itself should be treated

(5) As thing stand, a state of emergency needs to be declared in agriculture and agro-processing

(6) We also need to desperately step up our exploration of solid minerals and mining

(7) Tourism also needs to be given top priority. To do this, however, security needs to be considered as a matter of chronic urgency

(8) Clothing and textiles is another sleeping giant in Nigeria. If we can get our ankara, aso oke, damask, guinea brocade, etc industries up and running, we are on to a cash cow

(9) For me, however, the holy grail is manufacturing. Nothing lifts a country out of poverty and creates wealth as much as manufacturing. In Malaysia, it accounts for about 40% of GDP. We need a similar ratio in Nigeria

(10) I am surprised that the government has not put together a panel to address this matter. We have a panel on Trump’s visa ban but none on the economic impact of coronavirus???