By Dr. Udeme Nana
Since the discovery of oil in Oloibiri in 1956, its massive extraction and the concurrent boom that followed in the 70s, Nigeria, a country which economy was well grounded in agricultural produce, for local consumption and export, jettisoned the fertile land and got glued to petro -dollars revenue from the black gold.
Crude oil became the mainstay of the economy, accounting for 90 per cent of its annual budgets and foreign exchange earnings. This made Nigerians at all levels to develop a cargo mentality – a mindset wired on expectancy of a ship laden with goods for their pick every month without anybody dirtying his hand to add value to the economy. This time, the cargoes which berthed on our shores were laden with billions of US Dollars. This huge income, from the proceeds of oil, like the opium, sedated our policy makers, politicians at all levels and citizens alike, and got everyone irreversibly hooked to a single commodity economy despite the obvious danger that occasional price deeps pointed.
The invasion of the world by the prevalent and virulent coronavirus-19 pandemic and the resultant disruptions in the global economy has brought a most unexpected market forces on commodity demands leading to the sudden crash of unimaginable proportions in the price of crude oil in the international market.
In the tumultuous week that saw the collapse of crude oil demand and the concurrent price summersault, a major player in the oil industry, Mr. Udom Inoyo, who incidentally, is formally retiring as the Vice Chairman of Exxon Mobil Companies in Nigeria had noted in a speech he delivered at the dinner to mark the 2020 celebration of the feast day of St Patrick, the Patron Saint of his alma mater, St Patrick College, Calabar predicted accurately that a major ‘virus’ that would follow the covid-19 pandemic would be economic. He had worried about “our national budget which foreign exchange content depended almost totally on the price of crude oil”.
Speaking further, he pointed out that “our economy is still largely dependent on crude oil, a commodity we do not have market control of. With a 2020 budget set at $57 per barrel of crude, you will appreciate the impact on the economy now that crude oil is selling at $29 per barrel. It is not a comfortable place to be; but regrettably, we never learn from previous experiences. As a religious nation, millions of us started this year, as in previous years, with fasting and prayers. I endorse the place of God in our lives. But without discipline and efficient management of our resources, and especially an aggressive diversification of the economy, we will continue to be in a wobbling state”.
Continuing, he said “as we faithfully pray for a quick recovery and stabilization of the price of crude oil, let us also work hard to eradicate this virus which is caused by our profligacy.”
No wonder the Governor of Akwa Ibom State, Mr. Udom Emmanuel has tapped Inoyo to serve as a Member of a high-powered 20-member post Covid-19 Economic Reconstruction Committee headed by Prof. Akpan Hogan Ekpo, a renowned Economist, former Vice Chancellor of the University of Uyo, former Director of Central Bank of Nigeria, former Director-General of West African Institute for Finance & Economic Management and one who understands the underbelly of Akwa Ibom Economy having served as the pioneer Chairman of the Akwa Ibom Industrial and Investment Corporation (AKIIPOC) during the administration of Arc. Victor Attah.
Along with others, Mr. Inoyo is expected to share his deep insights to ensure that the economy of the State absorbs the shock and stays on course post Covid-19 pandemic.
This writer applauds the Governor for his foresight in setting up the committee and hopes it would rise to the challenges of the season and give a direction to steer Akwa Ibom economy away from crude oil.
The man who, from all indications, seems to have been made for a time like this was not just perceptive, he thought out a possible solution. Hear his diagnoses:
“Our experiences with crude oil prices and associated geo-politics advise against our attitude of eating the yam with the head, thus leaving nothing for re-planting. Now that the price of crude oil has so badly fallen and we are forced to review our budget fundamentals, what sectors of the economy should we review downwards? For me, wisdom advises that we cut on consumption and leverage on income generating investments and provision of infrastructure that will keep existing factories running while attracting new ones.” Mr. Inoyo admonished that “wisdom advises greater private/public sector co-operation so as to achieve greater inclusiveness in economic activities”.
He said it was pertinent that “we should look more inwards for local direct investments from resourceful entrepreneurs”.
These insights provide a window to the thought patterns of a proudly Akwa Ibom man who is prepared for leadership. Without a doubt , with the quality of minds in the Committee, the outcome would likely put Akwa Ibom on a new economic pedestal to continue the good works which Governor Udom Emmanuel is already doing.