One thing that has accompanied the global financial crisis has been a significant drop in the price of oil per barrel. It has fallen by 50% in the last three months. While some quietly argue that this was a ploy by the Bush administration to help Republicans win the upcoming election, it is more likely a sign that speculators and serious investors are putting their money elsewhere - gold, for instance, or letting it sit in a bank account.
These uncertain economic times have forced the Nigerian government to not only announce major budgetary cuts but to also announce that the government will need to look beyond oil for revenue and that
"There may be a need to intervene to balance the market, if the price slide seemingly predicted on demand and over-supply continues..."This follows the recent news from Soludo at the World Bank meetings that the Excess Crude Fund, a savings account that contained the windfall from oil earnings, is now depleted. And, this action may have been a reaction to the advise given by Ngozi Okonjo-Iweala of the World bank. She specifically stated on the 15th of October that
Is Nigeria Going Broke?
A few Nigerian banks have failed in recent weeks and according to a complaint from the Senate, the Central Bank was unable to promptly pay depositors of the failed banks. Additionaly, the federal government recently announced that due to insufficient funds, road projects will be financed with bonds.
These and other startling issues would suggest cause for alarm, however,
It seems that the federal government is preparing the nation to 'cut its coat according to its size'. That is a good ethic to encourage, especially as the financial crisis has affected every single person from the richest to the poorest. But as the federal government encourages this mantra, it would be a wonderful example if top ranking officials like the President, the heads of the Nationa Assembly and others took a pay cut. Afterall, their peers in
'Our representatives' must lead the charge in tightening their own belts now that oil wealth is dwindling. Members of the National Assembly should unilaterally forego their various allowances like the newspaper, hardship and constituency allowances. Additionally, the budget to remodel the Senate Speaker's residence, the same issue that led to the downfall of Patricia Etteh, should not just be cut in half as is now the case, but should be scrapped all together. Speaker Dimeji Bankole can manage without remodeling that house which continues to be source of ire. It has been almost a year since he moved in to the house and there is no rush to fix it up, is there?
Given that our oil wells will be empty in approximately 43 years, this financial crisis gives Yardy the opportunity to transform
Solomon Sydelle
Nigerian Curiosity