Russia/Ukraine War and Nigeria’s Sorry State
By Zeenat Sambo
The basic disadvantage of Nigeria’s oil sector has been the inability or failure of successive leaders to resuscitate the refineries. The position of Nigeria as one of the largest oil producing countries in the world is therefore shaky with the recent Russian and Ukraine crisis. It is difficult to understand the reluctance of the political class to fix the refineries and make the country competitive in the comity of nations.
Growing up, many of us believed that the queues will go away with time. Well, the queues have gotten worse over the years.
Things are now looking bleak in face of the Russia/Ukraine war. Russia is known to be the second-largest crude oil exporter in the world which makes the price of crude oil heavily dependent on the quantity of oil the country exports. As well as producing natural gas, it is one of the largest producers of clean energy.
Nigeria as part of Organisation of Petroleum Exporting Countries (OPEC) has been at a great disadvantage since the beginning of the crisis. It is evident that many OPEC countries also face depreciating oil and energy reserves but not as bad as that of Nigeria.
The months of scarcity that the country recently witnessed would have been averted if the four refineries in Portharcout, Kaduna and Warri were in production as expected.
The recent report by the National Bureau on Statistics (NBS) on trade indicated that the four refineries recorded massive deficits in billions of naira. This means the ongoing war between Russia and Ukraine is not the beginning of our problems. We are our own problems.
Corruption and inefficiency seem to have done it’s worst in the Nigerian oil and gas sector.
Due to the growing number of cars on the road, fuel scarcity is always a huge crisis and it’s a shame to an oil producing state that Nigeria is.
From power, technology, education and other sectors, unstable oil and gas situation affects the production of goods and services and every facet of the society. More Nigerians are increasing their demand for fuel in order to use their generating sets and industrial plants to aid production and also to meet domestic needs. This is not to forget the rising cost of transportation as well.
With Nigeria not able to meet up with current OPEC quota of 1.72 million barrels per day, it is not visible that the oil production will take any significant turn soon. Oil production has decreased from 2.51 million barrels per day in 2005 to 1.31 million barrels per day in December 2021, leaving the rusted oil giant at the mercy of more scarcity.
The Russian/Ukraine crisis has become another excuse for Nigeria’s poor economic managers. It’s a global crisis but only Nigeria is using as standard excuse for fuel scarcity.
I could not agree more with Tom Aniete, a manager of a notable filling station, who said that “Nigeria’s capacity is too great to run in to scarcity”. More affected by the crisis are commuters who rely on fuel to aid movement and for daily survival.
It would have been easier to project a future with no fuel scarcity in the country, but official reports by actors involved makesl it more scary to achieve a brighter future in the oil and gas industry. Like the worst is yet to come.
Of recent, the chief executive officer Centre for the Promotion of Private Enterprise, Muda Yusuf, noted that the Russia Ukraine crisis would lead to escalation of energy prices (diesel, aviation fuel, kerosene and gas), mounting petrol import and subsidy bills and the aggravation of petrol smuggling.
In the highlight of all this, changes in macroeconomic outcomes will take a turn, including the heightened fiscal deficit, growing debt levels, the spike in debt service payments and money supply growth.
He explained that “In Nigeria, the deregulated components of petroleum products would witness sharp increases. These include diesel, aviation fuel, and kerosene and gas would suffer the same fate.”
Still grabbling with the toss and turn in the oil sector, Nigeria Debt kept rising and predicted to hit about 50trn within a short period. I hope the people we entrust our government to will make amends for sustainability concern.
Meanwhile, about 30 percent of the global wheat export used for bread and confectionaries comes from Ukraine and Russia. With this continuous crisis, there is a risk of the cost of wheat going up, which will affect the price of flour, as well as bread and other confectionery products.
Nigeria with her vast agricultural potential is not expected to rely heavily on imported wheat’s for our confectioneries. This explains why Nigerians find it a challenge to afford bread as a supplement food due to the hike in food items.
It will also be recalled that due to this war many Nigerian students in Ukraine especially students had to seek closure back in the country. If all measures were put in place and education in Nigeria is at all-time best and competitive in the global academic terrain then no student will be forced to study out of the country.
An example is the unrelenting ASUU strike that has justified Nigerian education as a cock bull tale. It is a pitiable situation when Nigerians are not confident in their academics without being trampled upon by unfolding happenings in the country.
Obviously, this potentially great nation can do better than being the worst affected country in the world by a war that is taking place in faraway Europe.
