For the better part of this year, the price of crude oil, the commodity that provides Nigeria the bulk of her foreign exchange earnings, has been falling in alarming manner. Today, over 20 per cent of the revenue Nigeria used to earn in the good old days of steady oil prices on the international market only a few months back, has reportedly been lost. Expectedly and quite rightly, this has made many Nigerians jittery. But Nigeria is not the only victim of the jitters about falling oil prices. It is an economic epidemic, so to say, that has befallen all oil producing nations the world over. There is however a greater anxiety here because we operate a near mono-cultural economy. And when that main revenue earner is threatened, we have every cause for some concern.
This fear and anxiety are reflected in some alarmist and sensational headlines in newspaper and magazine articles written by some of our concerned commentators. We often come across articles with titles such as: ‘’Is Nigeria broke?’’ ‘’How healthy is the Nigerian Economy?’’, ‘’Development in the International Oil Market: Cause for alarm for Nigeria’’. Others have also asked: Is the government cognizant of this frightening global development? If so, what steps have been taken to avert any impending further deterioration in the revenue profile of the nation?
It is against this background of national apprehension that many concerned patriots eagerly sought to listen to the Minister of Finance and Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala who on Tuesday, 21st October, at the National Press Centre, Radio House, Abuja, mounted the Ministerial Platform to give account of the activities of, and the progress recorded by, the Ministry of Finance in the past one year.
After her eloquent and graphic presentation, the question inevitably popped up and was addressed to none other than Mrs. Okonjo-Iweala: Is Nigeria broke or is there no cause for serious alarm? Nigerians were eager to hear from the horse’s mouth. No, Nigeria is not broke, she answered simply and added on a humorous note that from the frequency of that poser, it was if some Nigerians secretly desire that their country should be broke! The Finance minister proceeded to assure Nigerians that the country will not be caught napping as government was keenly watching development in the oil market and that a contingency plan was being developed to contain the situation as it develops.
She admitted that Nigerians’ anxiety was quite understandable but that government was not in any way laid back about the situation. She said the situation would call for some belt tightening quite alright and that government expenditure might be cut but that we will weather the storm and move on. As someone who has become jittery and have told members of my household to prepare for the coming economic storm, Mrs. Okonjo-Iweala’s re-assuring words have indeed done me a great good. It has calmed me down a bit.
In terms of real policies, projects and plan to meaningfully address the volatile oil market, Mrs. Okonjo-Iweala told the nation that the ministry’s able macro-economic management and government’s efforts towards diversifying the economy by steering it away from dependence on crude oil, have yielded some remarkable dividends. She pointed out that non-oil revenue is increasing. As to be expected of a minister of finance, she gave plenty facts and figures to buttress her assertion that all was well with the Nigerian economy. But as she herself said at some point, it is not about the money and it is not about the numbers but it is essentially about making a real difference in the lives of people.
On this score, she was particularly proud of what the newly formed Nigerian Mortgage Re-financing Company has done by the number of mortgages it has created for thousands of Nigerians. She said the Federal Government’s 10,000 houses for public servants has attracted over 60, 000 Nigerians in both the public and private sector who desire to own their own homes. Although only 10, 000 were targeted, all the over 60,000 compatriots who have applied will be considered.
Other steps which Mrs. Okonjo-Iweala said the government is doing right which will mitigate the effects of the falling oil prices and keep Nigeria out of recession include tight fiscal management which she said has kept this year’s fiscal deficit not as large as of other years. She said there is great prudence in the management of our national debt. The government has kept domestic borrowing down and borrowed more from external sources, especially from multi-lateral organisations with long tenor and generous repayment terms. Contrary to the fears of many Nigerians that the government was borrowing too much, a development that could take Nigeria back to the debt noose, the finance minister said the uniqueness of this government’s borrowing is that it is targeted at developing the nation’s infrastructure to enhance the growth of the economy. She gave the figure of the nation’s debt-to-GDP as about 12 per cent which she said is within acceptable
limits.
To further douse the tendency among Nigerians to portray their situation as worse than it really is, Mrs. Okonjo-Iweala said that our foreign reserves and the money in the Excess Crude Account are enough to sustain over nine months of imports. From Ngozi Okonjo-Iweala’s body language the message was clearly that Nigerians should not worry unduly. I agree with her and wish to add that even if the situation is dire (which she said is not), we need to re-assure ourselves that all is well. Doing so is both spiritual and rational. We will call evil upon our country by exaggerating our fears. Agonizing unnecessarily at this point will do us more harm than good. As the late activist Taju Abdulraheem would say, we do not need to agonise but to organise. The time has come for us to do more to diversify our economy and make it less dependent on oil. We have said this for so long that it has become a cliché. The rude shock from the oil market should be a wake-up
call on us all.
There is growing confidence of investors both domestic and foreign in the Nigerian economy. We ourselves should therefore not say or do anything that would cast doubt about our ability to steer the economy towards the safe and sound direction. The granting of full membership status to the Nigerian Stock Exchange by the World Exchanges Federation is a vote of confidence on the Nigerian economy. With a self-confident person like Okonjo-Iweala at the helm of our economic management team, the goodwill of the international community and with our prayers, one hopes that Nigeria is safe.
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Article written by Indang Alibi
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