Chronicles

Nigeria economy on “Penkelemess (Peculiar mess)” zone

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I listened to some so called economists in Nigeria and I wonder what they were spewing out. I read some analysis from some economics experts and I cringe. They come out with analysis as if they are analysing the economy of USA, china or the UK.  They give indices that just don’t make sense.

 

We have a very serious problem, forget all the grammar. The problem we all have right now is that crude oil is selling about $44/barrel. Infact as I speak to you there are many inventories of our crude oil in the high sea waiting to be “bought”.  What this means is that, even at the low rate, it is still difficult to sell continuously as we would want to. What does this portend? There is far less money for the government to spend.

 

See, in any business, there must be inflow. In Nigeria’s case, the major source (about 90%) of our inflow is from that crude oil. The budget Jonathan prepared for 2015 was on $65/barrel. With the current price of crude oil, it is a no-brainer that the budget is essentially useless. Sometimes I wonder the budget this present government is even working on with what is on ground.

 

I am not surprised at the action of government on activating this TSA project. I am not equally surprised that many people don’t want the TSA. I have always insinuated such in many of my articles. It is difficult for many so-called billionaires in Nigeria to use their so-called billions and create wealth. They mostly use the same government money that is coming from crude oil sales through bogus bank loans.

 

Let me explain something here that shows how dysfunctional our economy model has become. When People tell government that they should remove subsidy on Petroleum I agree. However, I tell people that the mere fact that there is TSA is a “pseudo fuel subsidy removal “ in another sense. With the TSA in place, it would be difficult for fuel marketers to use government money to buy fuel and then make profit on top of everyone.  This is the major source of the unending fuel crisis we are seeing. The marketers want government money to do business and that’s it. They have all been using the money all the while. However, as the oil price has slumped so has government attitude to the use of her monies in the banks. Government had to close shop. This is a problem as they are not used to it. How can an economy grow when no-one is bringing in money?

 

The other day MTN was slapped with a fine of 5.2billion dollars for violation of communication security ethics. Let me tell you something; MTN didn’t want to source any of the money from South Africa. MTN actually wanted to source the funds as loans from Nigerian banks. This would have been possible if government hadn’t come with the TSA matter.  Banks would have just syndicated government funds in their vaults as loans for MTN. MTN would just get out of the hook because all the risks of the loans would have been on the system. It would just be like government punishing herself.

However, the  trouble for MTN as we speak is that no bank can afford such “loans” because  the banks have less control over government money as they used to be.  I even fear the current status of many banks because of this because there “high moral” before na government moni oo!! Due to this, MTN is now being forced to source money from South Africa which is the issue. MTN is not used to that. That is a foreign company remember? That is the definition of “foreign investment” in Nigeria. confusion everywhere!!

Many  so-called foreign companies in Nigeria don’t come with inflow into the system. They always want to use the money available in Nigeria system  to fund their  nigeria and other countries operations which is so sad.  What many of them do is to come up with the initial capital then nothing more.

Since everything now revolves around government which in turn gets its source from dwindling oil revenue, what do you expect? Unless the oil price increase significantly,  Na grammar and grammar o!!

The way it is now; our saviour would be our other natural resources in short run then we can easily face industrialization in the long run. Every state might need to look for the natural resources to see what inflow can come in from that angle. We need money and we need it very fast.  When you tell individuals who have been used to big fat money from crude oil to suddenly face farming, that would be tough in reality I tell you. Something has to be done to make up the sudden sharp fall in oil revenue, or else, the consequences could be dire.

Make no mistake about it everything is linked to that government purse. The industrialization level of Nigeria is barely existing. The customs agency would really need “God intervention” as we all know it.  Meanwhile, Nigerians need to stop making excuses or defending anyone invited (or being charged to court) for corruption. We cannot say we want good life yet we blame government in this corruption issue. Let everyone that’s caught talk for himself!!

For now it is “Penkelemess” (Apologies to chief Adelabu of blessed memory)  for our economy…Ewolewoo!!!

About the author / 

Ik Uremeh

Ik uremeh is a social commentator who believes that everyone deserves to live within the confines of his strengths. He is just like YOU.He says: Life is good when everyone desires so...

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