Nigeria must suspend the federal allocation formula this month and hand state governors barrels of oil instead

By Ayo Akinfe

(1) As the coronavirus drives the whole world towards another depression, everyone is thinking on their feet and acting accordingly. With the way things are going, we may witness something as terrible as the 1929 Wall Street Crash

(2) What makes man thrive is his ingenuity. Our ability to adapt to changing circumstances is what makes us unique. I do not know of any other species of animal whose numbers are increasing. We are alone in that regard because we always find ways to adjust to changing scenarios

(3) When I see the way Europe is altering everything it does in response to this virus, I keep asking myself what my people are doing. Crude oil prices are now below $30 a barrel and Nigeria cannot sell any oil even at that price because the likes of Saudi Arabia and Iraq can offer huge discounts

(4) As a result, barrels of oil are stockpiling at our export terminals with no buyers. This is only going to get worse as the economic fallout of the coronavirus hits home further

(5) It will be delusional for Nigerians to think that things can go on as usual in this environment. For starters, our 2020 budget is predicated on us selling about 2m barrels of oil a day at $57 a barrel. At this rate, we will be lucky to sell $1m barrels at $30 a barrel

(6) How anyone can even contemplate the idea of our revenue allocation formula continuing against such a background is beyond me. Even if the federal government wants to continue, it simply will not have the cash to distribute to the 36 states

(7) When barrels of oil are sitting idle at our export terminals and the government has no cash, surely it makes more sense for the federal government to hand the crude to our states to sell. Let the governors go and look for buyers themselves

(8) There is nothing radical about this proposal in my opinion. If airlines can shut down, the major European leagues can suspend their operations and retail outlets can restructure their activities, it is perfectly reasonable to ask Nigeria to react too

(9) Countries whose economies are based on tourism are going to have to make huge adjustments this year. Similarly, those like ours whose economy is centred on crude oil are going to have to make painful and maybe irreversible changes too

(10) Who knows, maybe some of our governors may find ingenious ways of getting industry going with this oil. This may be an opportunity for some of them to show the stuff they are made of