Politicisation of Declining Oil Prices

By Olusola Daniel

Over the past few days, I have read and listened to various discussions about the state of the Nigerian economy, and it is disheartening to see some supposed opinion leaders feeding the public with half-truths or blatant lies all in a bid to achieve their sinister objectives. One would expect an issue as crucial as this to be taken with all seriousness rather than being used as an opportunity to score political points while launching ill-advised missiles at well-meaning public servants.

Like King Solomon said in the Holy Writ, sensible people foresee trouble and hide from it, but gullible people go ahead and suffer the consequence. This aptly describes what we are experiencing in Nigeria today. Like a sentinel watching over the economic affairs of our nation, the finance minister has repeatedly warned of an impending shock. This apostle of prudence, who set up the Excess Crude Account to build up savings for the nation, has continued to caution the political class against profligacy while advocating for healthy savings.

These moves by the finance minister, in addition to her consistent calls for cutting down recurrent expenditure and setting lower budget benchmark in light of global economic realities, have met with stiff resistance from our lawmakers at the national assembly and our all-powerful state governors. Is it not therefore surprising that some folks would say she didn’t sound the alarm early enough when she has been drawing attention to these realities for more than three years now? Shouldn’t we rather question the governors and legislators who have depleted our reserves by constantly laying heavy demands on our oil earnings to fund their profligacy?

While commenting on the issue in April 2012, the minister noted that fiscal federalism has made it difficult for the country to save. “It is difficult getting governors to agree to $1bn savings for the SWF. We had the state governors saying they can only allow $1bn. Now they say it is illegal and the country is not able to save. In the excess crude account today we have left only about $3.6bn. Should the oil price drop today we have no cushion because $3.6bn for this economy is not enough to take us to any length of time,” she said.

Rather than criticising madam Okonjo-Iweala for everything that goes wrong, we should commend her for working hard to stabilise the economy. She has continued to defend the interests of the average Nigerian in spite of stiff opposition from those who would rather squander our commonwealth on self-aggrandisement. Even in this difficult period, she has advanced measures to protect the poor through the retention of critical infrastructure projects and building of social safety nets. Another commendable move is the planned luxury tax on private jets, champagne and other luxury goods such that the rich would also bear the brunt of the economic downturn.

When one objectively examines the measures that the minister has announced for managing the impact of declining oil prices, one cannot but appreciate her diligent efforts to help the nation cushion the shock. Having helped other countries such as Malaysia which have gone through similar challenges, she has brought her experience to bear to ensure that Nigeria has a robust strategy to confront the situation. As a technocrat, the minister of finance has not ceased to condemn profligacy and wasteful spending by politicians. We ought to team up with her in this fight rather than lending unwitting support to political figures who want to destroy confidence in the economy to help pave way for their selfish ambitions especially as we approach 2015 elections.

Olusola Daniel is a political observer and advocate for community development. He writes from Lagos, Nigeria.

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