The age of oil is over for nigeria — 1 By Dele Sobowale Also, most market watchers and economists now believe that the current situation in the oil market may not be transitory, but, seemingly permanent. Godwin Emefiele, CBN, Governor, at Chartered Institute of Bankers Dinner, in Lagos, December, 2014. The Governor of the Central Bank of Nigeria, CBN, is charged with formulating monetary policy which is expected to be complimentary to the fiscal policy for which the Minister of Finance is responsible. Unlike the Minister, the CBN Governor, once appointed and confirmed by the Senate, cannot be removed by the President for five years unless proved guilty of an indictable offense. That was why President Jonathan’s suspension of former CBN Governor, Lamido Sanusi, would have established a legal precedent if Sanusi had not been made Emir of Kano. Generally, the autonomy of the Central Bank, in most countries is sacrosanct and cannot be intruded upon by elected officials. For the sake of those who might not know, as well as those who already know, the CBN Governor, in setting monetary policy aims to achieve three main objectives: exchange rate stability, interest rate and full, or near full employment. Full employment, however, does not mean all those needing jobs will be employed. The term full employment allows for about four per cent unemployment. Nobody needs to be told that Nigeria had achieved relatively stable exchange rate, about N155-158/US$1 for several years; — until last month when the CBN was forced to devalue. Even now, nobody can predict where it will settle. The safe bet is that this is only the first in a series of devaluations. Interest rates, although high by global standards, had also remained fairly stable. Inflation, which is a reflection of how those two rates had been managed, had been below ten per cent for almost three years — until now. Only the jobless rate had been way off the mark; and is now set to get worse. Those remarkable achievements, until now, had been made possible by the price of crude oil which had stayed above $100 per barrel for more than three years. But, unfortunately, while the price of crude had stayed high, the volume officially sold had declined in the last two years for several reasons, chiefly, stolen crude, vandalisation of pipelines, loss of market share, and, lately, global economic slump. Until this year, most Nigerians had been spared the nightmare of the day the Age of Oil might be over. Now, the dreaded day has arrived and the CBN Governor’s warning to the bankers, as well as all Nigerians, comes years after Governor Emmanuel Uduaghan, of Delta State, had attempted, in vain, one should add, to get the people of the state to start thinking of Delta Without Oil. But, even Uduaghan’s prescient warning came a few years after I had been preaching, like the lone voice in the wilderness, that Nigerians should start planning and working SERIOUSLY for the end of the Age of Oil. The CBN Governor deserves commendation for this revelation. It is the first sign that somebody at the topmost levels of government, in Abuja is, at last, taking the handwriting on the wall of time seriously. For one top official to be half-awake in a government full of sleep-walkers is a sign that all is not lost. Decades ago, when Alvin Toffler wrote his best selling book, FUTURE SHOCK, as a subscriber to a book club in America, I was one of the first recipients. The book was in many respects an eye-opener for me because it drew my attention to the need for nations, states or regions, corporate entities, and, even individuals, to undertake serious studies to determine the future of those things that define their existence. For Nigeria, since the mid-1970s, that has been crude oil. For all the talk about our agricultural output, including the phantom 80% self-sufficiency in rice production and cassava bread, the Federal and state governments still gather, in Abuja, every month, to share crude oil proceeds. Obviously, until something else comes along to replace it, crude oil has become the second god we worship. That second god is threatening to let us down the moment at a time when government must choose between guns and garri. We need to pray. But, prayers are never enough. Nigerian governments, Federal and State, should have officers who know the crude oil market in and out; or ask for help. Granted, futurism is not an exact science, and forecasting five, ten years into the future is fraught with dangers. - See more at: vanguardngr/2014/12/age-oil-nigeria-1/#sthash.e7cfnqBF.dpuf
Posted on: Mon, 15 Dec 2014 10:54:40 +0000
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