National economic efficiency and naira-for-crude initiative

The current state of the nation, no doubt, speaks much about the worrisome situation in today’s economy and security in the land. The nation’s accomplishments and her future wellbeing urgently demand strategic plans on how the leadership could pilot the affairs towards actualising result oriented, good governance for everyone. Without prejudice and being modest, the practical strategic plan cannot be better than to run government with a business mindset (with the passion and utmost caution every genuine and legitimate business always requires, not to incur losses). It is on this note that correctional measures can best be applied on national administrative tasks, from the perspective of managing the nation with a business mindset, which primarily, focuses much on continuous gains (profit making) than losses, from every effort put in, ab-initio as the aim to achieve success (all things being equal).

Too much bureaucratic processes in running a seemingly flawed government programme that is already facing threatening economic and security challenges (but, has hope of survival, based on the nation’s attractive potentials from a SWOT analysis) cannot work, if the administration insists to go the route of “business as usual” in such a desperate situation.

There are, indeed, many ways and strategies the present government can apply towards ameliorating the deplorable economic situation in the land, and also to stem the insecurity threats presently ravaging the society as a result of the increasing unemployment rate in the labour market. One good (in fact, very commendable) measure the government has taken is the policy called “naira for crude” which it is continuing as a programme for local refineries operating in the downstream subsector of the nation’s petroleum industry. This singular policy will significantly turn around the landscape of the economy, especially when the concept of value addition is substantially implemented on virtually all raw materials that the nation is richly and naturally endowed with (produced from various economic subsectors). The government’s stance on this policy initiative to revive the nation’s downstream operations through a strategy for full blown “backward integration” programme by beefing the activities of local refining of crude oil, supplied by the NNPCL in local currency (naira) denominated value, is hugely commendable. Every attractive economic enabler and its attached advantage that is positioned along with the related economic pillars and building blocks, for productivity or the gross domestic product (GDP) growth, clearly manifests in this naira for crude initiative, with positive impact on the economy; (like the low fuel prices projected on the back of the naira-for-crude deal). The initiative is a very good policy that can speedily facilitate the recovery of the economy through a much enhanced, rapid productivity growth (because, presently the economy is not producing enough domestically). The regulators of this initiative, including the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), are therefore, commended for a job well done (especially the new management and board of NNPCL), as well as with encouragement to further sustain this technical programme, by production of more crude in its daily output.    

The ongoing Trump’s tariff war seems more than desiring a trade war between the United States of America (USA) and China but, a war for the future of global finance or monetary dominance (vis-a-viz the US-led global financial order; with the obvious pressure on the United States dollar, presently). As both great economies flex muscles over their respective financial fortress; let our “very insignificant financial economy” focus much more on building up an independent and stronger national economic efficiency through our domesticated home grown wealth conservation agenda, through value addition on all our locally sourced raw materials (in our own local currency) and thereafter, bring out our processed products (either finished or intermediate/semi finished) to the international market.

Gradually, the economy shall start gaining relevance in the global financial space. One believes that the current global trade turmoil is going to be a blessing in disguise for this economy, providing an opportunity to showcase her potential performance capabilities. The WTO director general, Ngozi Okonjo Iweala, has remarked that “Trump Tariffs could cut world trade by up to 1.5%”. So, this nation’s strategy should focus on capitalizing on the ongoing global challenges to quickly adapt and rearrange the administrative structures to wear a purely business face, where the government could concentrate on rapidly repositioning the economy faster than ever expected, based on its identified potentials, its abundant raw materials base, which she can readily pride herself of. This can quickly give the nation unexpected trade surplus, under the ongoing tariff confusion amongst the big economies. The economic and national planning team needs to be smart at a time like now, to pull this economy out of the woods; since we basically do not have the capacity to withstand any external financial pressure that could trigger a chain reaction (looking at the oil benchmark for the national annual budget, which is already in deficit with the depreciating price of crude in the international oil market). 

This economy needs to tenaciously have a firm grip on this naira for crude initiative; alongside a very robust programme on value addition, to be urgently replicated/implemented on all locally produced raw materials that are available in the economy.             

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