Increasing foreign exchange earnings in the short term for Nigeria

COMMENTARY: Taking advantage of the looming energy crises in Europe.

ICMS, Inc. Reports

By Tom Okure, Ph.D.

March 13, 2022

Fuel Scarcity, high inflation, insecurity, electricity blackouts for days even in FCT Abuja in Nigeria has gotten so bad that life is becoming unbearable for ordinary Nigerian citizens.

Why can't our policymakers get it together after so many decades of independence? Here below is my policy recommendation and something worth thinking about.

Nigeria is blessed with enormous natural resources and is a major oil producer in the world. Oil just reached/sold at $135 a barrel in the global oil market recently. The conflict between Russia and Ukraine (terrible and unfortunate situation) and reductions of oil sales to Europe as a consequence, ought to benefit Nigeria's crude oil and gas sales and foreign exchange earnings tremendously in the short term.

Nigeria can help solve the energy crises looming in Europe and our policymakers should be proactive by taking advantage of the crisis situation to boost our foreign exchange earnings.

It is time for our policymakers to think outside the box for our economic self-interest. 

The European Union (EU) is currently sanctioning Russia by implementing a policy of reducing its dependence on Russian oil and gas purchases. There are discussions with Japan, Norway, Suadi Arabia, UAE, Morroco, and even talk about boosting oil purchases from Venezuela and Iran (by lifting existing sanctions) due to the war in Ukraine. Nigeria has not been mentioned as a potential source of additional oil purchases to make up the oil and gas supplies deficit in Europe.

In view of the economic crisis that Nigeria has been facing over the past several years, especially the worsening problems caused by COVID-19, it is imperative that our policymakers should be reaching out to the EU to make long-term oil and gas supply deals to reduce the EU's dependence on Russian energy supplies. Our economic self-interest requires that we should sometimes boldly act and think outside the box even if it is counter to the current policy of OPEC to maintain world oil production levels at the organization's restrained level. We need the quick inflow of foreign exchange to reduce the suffering of Nigerians. We could secure help and a contract from the EU to finally build and complete that crude oil delivery pipeline from Nigeria to North Africa and into Europe. Let us use the crisis to our economic advantage. If we don't take advantage of the situation other nations like Norway, Saudi Arabia, and UAE will do it and will be awash with more oil revenue reserves than they can spend.

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All rights reserved by Tom Okure, Ph.D. The writer is CEO of Inter-Continental Mgt. Systems, Inc. (or ICMS Inc.). ICMS, Inc., is a multifaceted business and management consulting firm with its head office in Albany, New York.