Nigeria should set up an oil bonanza committee to invest the gains of the Russian-Ukraine war

Ayo Akinfe

[1] As a result of the Russia-Ukraine war, global crude oil prices remain over $100 a barrel again

[2] Worth Russia being the world's second largest crude oil supplier, taking their huge reserves off the market was always going to create a bull run, which Nigeria is currently benefiting from

[3] If this war persists and pushes prices up to say $140 a barrel as happened during the Goodluck era, we could see another mega push towards ending the dependence on petroleum

[4] Nigeria has got to treat the Ukraine War as her last oil bonanza and thus make it a major national priority

[5] Personally, I take the view that if there is conflict, this will be the world’s last oil war as the way everyone is moving away from crude will make the commodity irrelevant in global economics soon. Once upon a time, coal was the world’s most important resource but today nobody is interested in it and crude oil is going the same way. Every major automobile manufacturer is now producing electronic cars, with most of them due to phase out petrol and diesel vehicles soon. This will bring the demand for petroleum crashing down and ultimately, the market price will become less than production costs, making crude oil an unprofitable business

[6] With this crisis, Nigeria has been thrown one last lifeline. We are in the last chance saloon and we simply have no choice other than to make the best of this last hoorah. Nigeria’s budget is predicated on crude selling for $60 a barrel, so now prices have hit $100 a barrel, we need to come up with an aggressive plan to invest that excess of $40 in an unprecedented and radical industrial programme that will see us upgrade our infrastructure and join the global manufacturers’ league

[7] Nigeria is believed to generate about $50bn a year from crude oil sales, with about half of that going into the nation’s coffers. Joint venture arrangements, unpublished deals and blatant corruption means that a lot goes elsewhere, so as things stand, we only have between $24bn and $30bn to spend annually. This is nonsensical as we have an annual infrastructural deficit of $100bn a year and until we break that cycle will remain the poverty capital of the world. It is kind of like earning $300 but your rent and kids school fees adds up to $1,000. There is no way in the world you will be at ease no matter how judiciously you spend that money and if there is zero corruption in your household

[8] Nigeria needs to set up a special crude oil bonanza committee to prepare for the eventuality of a spike in petroleum prices. It should put together a list of investment projects that would generate significant income immediately, target spending in infrastructure like power and transport that will boost growth and obviously make economic diversification its primary objective. This committee should consider itself as being on a do or die rescue mission. If it fails, Nigeria may be doomed forever

[9] Also, when Saddam Hussein’s regime fell, many of his scientists were snapped up by other nations but alas, Nigeria was sleeping on duty. Just imagine the kind of hardware our Defence Industries Corporation would be producing if we had got hold of those Iraqi scientists who manufactured the Al-Rasheed scud missiles. Boko Haram would not be doing all this shakara as a battery of locally-manufactured Katyusha rockets would have long scattered their Sambisa Forest camps. We should not make the same mistake in Ukraine or Russia after this war. If any of their experts are up for grabs, we want them! Our committee needs to put the necessary mechanisms in place to exploit the situation

[10] To make things clearer, Nigeria basically needs to set herself a date when she will stop crude oil production and work towards that. If for instance we are working towards 2050, the year we are due to become the third most populous nation on earth, we need a plan to replace oil revenue by then. I also think our landmass will need to be expanded so we need to also focus on which nations we will merge with. Nigeria has her work cut out and fortunately, we have one last chance to sort things out!