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By Jennifer Daniel
On the 7th of October, 2021, President Muhammadu Buhari, GCFR presented the 2022 National budget to the Nigerian National Assembly, and the concern for many remains the huge dependence on borrowing and the corresponding cost of debt financing.
Alarming as it is, a few analysts have continued to comment on the way forward and seem to jointly echo one message; “improve the revenue generation”! I for one joined the ‘tech and Agriculture’ bandwagon; after all we have the land area and the human resources to harness both. Hon. Muhammad Gudaji Kazaure representing the Kazaure Federal Constituency of Jigawa State at the National Assembly is a notable member.
For the fact that revenue generation and the affairs of future generations is on the front burner of discourse, the grass ahead could really be greener. It is no news that oil and gas is the bloodline of the Nigerian economy and so proper attention must be paid towards its efficient operation and administration, pending our effective transition to a more fluid and robust multi-contributory economy.
The good news is that the price of oil has been on the rise; from $37.46 Per Barrel to $83.00 Per Barrel within the last twelve months. What does this mean for Nigeria besides a jump in her foreign reserves from $33.66B to $36.26B between August and September 2021 alone? It means this is the best time for strategic action by stakeholders; this is arguably the most ideal time to ramp up production considering the shortfall that we have experienced in relation to our OPEC Quota, a staggering 161,000 BPD deficit. With a budget that targets 1.88 Million BPD, this is an overt invite.
Africa’s most mercurial entrepreneur and his team at the Dangote Group seem to have been bitten by the action bug. They are not moping and wishing but actually taking steps to bring erstwhile underperforming fields within their legitimate control to full production as soon as possible. Indications are that the Group through its subsidiary, WAEP is partnering with an indigenous oil and gas company to make sure Nigeria’s revenue from oil is relatively shored up and potentially reduces the need for borrowing. This move highlights the intelligence of the team as the strategy of having the whole operation undertaken in country aligns with the local content policy and inhibits capital flight and forex repatriation should such contracts be awarded to foreign companies.
This is undoubtedly an unequivocal call for all asset and infrastructure owners to mobilise to location barring any safety concern for better engagement of local contractors, in-country resources/assets for the salvation of the Nigerian economy through the generation of Forex and reduction of the scary inflation.
The author is a PhD candidate at the Centre for Innovation & Entrepreneurship, University of Bristol
