PRESS RELEASE: Nigeria's Economy On The Brink Of Collapse, ACN warns
Posted: February 24, 2013 - 12:35

CBN Governor Sanusi Lamido Sanusi, IMF's Christine Lagarde and Nigeria's Finance Minister Ngozi Okonjo-Iweala
By Alhaji Lai Mohammed
The Action Congress of Nigeria (ACN) has alerted the nation to an impending collapse of the Nigerian economy, unless the Federal Government cuts the astronomical cost of running a bloated government and takes urgent measures to diversify the economy and shore up the production of oil, which remains the mainstay of the country's economy.

In a statement issued in Lagos on Sunday by its National Publicity Secretary, Alhaji Lai Mohammed, the party warned that if the listed measures were not taken, the government may not be able to pay its bills, including workers' salaries, within the next few years.

''Contrary to what the FG may say, this warning is not about crying wolf but is actually borne out of a patriotic fervour devoid of politicking, which is the usual refrain of this government when alerted to its shortcomings,'' it said. ''We will like to be proven wrong, but this will depend on uncommon and monumental effort, rather than on the basis of the usual canned response from the government.''

ACN said the red alert was based on four empirical evidence: The cost of oil production which has skyrocketed from 4 dollars per barrel in 2002 to 35 dollars presently; the massive corruption in the oil sector, with oil theft and sabotage leading to lost production and costing Nigeria some 6 billion dollars annually in crude theft; the sharp fall in the discovery of new oil and gas reserves due to the low investment in the sector, and the most serious of all, the
challenge posed by alternative sources of global supply of oil and gas.

The party said the cost of oil production rose from only 4 dollars per barrel in 2002 to 7 dollars per barrel in 2005 and, from the 12 dollars per barrel at the onset of the Yar'Adua/Jonathan Administration in 2012 to 35 dollars per barrel in 2012, according to the just-concluded Nigeria Oil and Gas Conference in Abuja, where the mind-boggling cost hike was attributed to the cost of security in the Niger Delta (put at 16 dollars per barrel), it said.

''In other words, the gains recorded from ending militancy in the Niger Delta due to the Amnesty Programme have been wiped off by the cost of maintaining the 'peace'. Here is how Shell Nigeria MD Mutiu Sunmonu described the situation: 'Operating in the Nigerian oil and gas environment can be long and tortuous with costs at the high end of the global scale. There are a multitude of security related issues that have to be dealt with on a daily basis.

'''In the recent past, militancy has simply been replaced by INDUSTRIAL SCALE oil theft and sabotage(emphasis ours). We, and others, have had to shut-in significant production; spend huge amounts on replacing and repairing hardware and deploying massive resources to clean up spills'.”

On the discovery of new oil and gas reserves, ACN said the disastrously-low level of exploration activity in Nigeria is supported by the statistics released by the US Department of Energy for deepwater discoveries from 2009 to 2011 in which Brazil alone contributed some 40 new discoveries or 20 percent of the global total, US and Australia contributed 10% each, countries like Ghana making nine new discoveries or 5% of the global total, while Nigeria had only 4 discoveries or 2% of the global total during this period.

This paltry discovery of new oil and gas reserves is due to the low investment in the sector, which needs to attract 15 billion dollars annually in capital investment, up from the present 3 billion dollars, in order to remain a significant global oil supplier and a respected player in OPEC, the party said.

It said, however, that all those challenges pale into little significance when placed against the challenge posed by alternative sources of global supply of oil and gas seriously - that is Shale oil and Shale gas!

''Here are the facts: The US has more than doubled its estimates of recoverable domestic Shale-gas resources to some 827 trillion cu. ft. (23 trillion cum), more than 34 times the amount of gas the US uses in a year.

Together with supplies from conventional gas sources, the US may now have enough gas to last a century at current consumption rates.

''Last month, the agency released a similar announcement in respect of Shale oil to the effect that California's valleys alone hold as much as 15.4 billion barrels of Shale oil, which companies were hitherto unable to reach because the oil exists in pockets of rock that were expensive to reach before the present advancements in fracking technology. Similar announcements are being made in Europe and parts of Asia.

''For the first time in nearly a decade, the US has regained the position of being the world's largest producer of natural gas and soon also oil. Thus, in less than five years, the US has gone from seeking new sources of oil and gas overseas to being self-sufficient. Industry experts believe that Shale oil and Shale gas will revolutionize the industry—and change the world—in the coming decades. It will prevent the rise of any new cartels and alter oil
geopolitics.

''The announced objective of the US Government is to drive down oil prices from the current 100 dollars per barrel to 50 dollars per barrel within 2 years. If this happens, which is very likely in view of the alternative sources, Nigeria, with a cost of production of 35 dollars per barrel, would immediately go out of business, with dire consequences for an economy that thrives largely (if not solely) on oil,'' the party said.

It said the signs of imminent trouble are already visible for those who are willing to see: The Brass LNG Project is unable to take Final Investment Decision (FID) because of the collapse in the US LNG market and rising costs; and a similar situation faces the Olokola LNG Project.

ACN therefore called on the Federal Government to put on its thinking cap in order to rise to the challenges listed above and save Nigeria's economy from collapse, adding that any delay could mean that those in charge of the country's affairs would not have enough time to change
course as the ship of state heads for the rocks.

Alhaji Lai Mohammed
National Publicity Secretary
Action Congress of Nigeria (ACN)
Lagos, Feb. 24th 2013
Source
saharareporters.com

Lai should tell us the difference between ACN and PDP. To make the matter worse, the leader of ACN is no other but Tinubu. Nigeria is blessed with corrupt leaders.

Let's be frank here, Lai just spoke Ϯh℮ truth especially as regards the increase in oil and Gas production in USA. I was watching Bloomberg and an analyst was saying that USA will start exporting Oil and Gas in few years time. This will indeed spell doom for us Nigeria.

The FG should fast track the diversification of our economy ASAP. The NASS should fast track the passage of PIB and a bill on Solid Minerals exploration. And also Repeal the Land use act.

In few years time,our northern brothers will be the ones agitating for fiscal federalism because the price of oil will crash to less than $20 per barrel and they ofcourse have arable land and are blessed with huge deposits of solid mineralS

confusion247: Lai should tell us the difference between ACN and PDP. To make the matter worse, the leader of ACN is no other but Tinubu. Nigeria is blessed with corrupt leaders.

can you pls comment on the points raised? Stop answering solely to ur to self infested stance; you have a lot to worry about in the face of veritable facts and damning stats emanating frm dis post - well dats only if u want the best for the country anyways

You know how they could cut costs?
By cutting fat government salaries, but somehow I dont think they'll be doing that soon (or that ACN will agree to it)

Sorry for the ignorance o, but erm i think say economy bin don collapse before, or are they telling me we are going to be the next zimbabwe?

Bad belle economics, nothing else

Hahahaha. Will ACN senators and reps allow their Pay and allowances to be Cut down?.. Who are they deceiving maybe them papa and mama

Do we still a political party called ACN?

Attention seekers

Let the economy collaps so niaja will disintigrate

I am actually surprised the economy hasn't collapsed since with all the Misappropriation of public funds.

We still gat the oil!!

I ptiy myself,family,lineage,tribe,and most importantly Nigeria cos the future doesn't look good.

mujiboy: I ptiy myself,family,lineage,tribe,and most importantly Nigeria cos the future doesn't look good.

yOU BETTER MOVE YOURSELF AND FAMILY OUT OF nIGERIA O

Oh it is still "on the brink" of collapse. I thought it had collapsed already.

Oh it is still "on the brink" of collapse. I thought it jad collapsed already.

Awaiting sinceregarrian to come tell us something different.

How do Ѿε̲̣̣̣̥ improve our agriculture sector when Ѿε̲̣̣̣̥ have idiots with stupid ideas like buying mobile fones, for 5 decades Ѿε̲̣̣̣̥ have depended on oil to help drive d economy it was jt a matter of tym USA figure out how to cut d middle man and produce dem selves. This change ACN is talking about is not only for PDP Ѿε̲̣̣̣̥ all hav to figure out how to depend on other resource. If the economy crashes Ѿε̲̣̣̣̥ all will figure out how much other countries hate us. I mean all of us. I don't just want to picture nigeria in another 20years without oil and gas, it will literary become the end of our world, the north will actually have power in their pocket (scary)

Some drastic measures are surely needed in this country. Any way, the plight of Nigeria can NEVER affect my destiny.

First of all, is their still a party called ACN? I taught there was a meger, or are they confused?

Secondly, the nigerian economy is not on the brink of collapse, no matter how much oil the u.s produces, even they themselves admit it can't feed their country, plus nigeria is not the only oil producing country around. There is the middle east, south america, eastern europe, and other platforms on the atlantic yet our oil is still sort after, so the idea soon no one will want our oil is marlarkey!!

And lastly, if the ACN studies better they'll realise nigeria is slowly moving away from oil, nigeria has africa's largest telecommunication market, one of the buisiet ports on the continent due to the commerce, and the upward trend of the nigerian economy made the owner and ceo of airtel international to call it the "sexiest economy in africa"...i urge ACN or the new party to find the better arguement for why they are better than PDP rather than predicting doom and gloom for our economy.

Omerian Consult: Why complain to Nigerians. Sanusi should tell his employers to act right.

50calibre: I am actually surprised the economy hasn't collapsed since with all the Misappropriation of public funds.

. Factories are springing up in agbara shagamu ikorodu axis at leas five in every month if the economy is colapsing then what are the factors that are making these factory to spring up.

50calibre: I am actually surprised the economy hasn't collapsed since with all the Misappropriation of public funds.

. Factories are springing up in agbara shagamu ikorodu axis at leas five in every month if the economy is colapsing then what are the factors that are making these factory to spring up.

50calibre: I am actually surprised the economy hasn't collapsed since with all the Misappropriation of public funds.

. Factories are springing up in agbara shagamu ikorodu axis at leas five in every month if the economy is colapsing then what are the factors that are making these factory to spring up.

Omexonomy: . Factories are springing up in agbara shagamu ikorodu axis at leas five in every month if the economy is colapsing then what are the factors that are making these factory to spring up. . Factories are springing up in agbara shagamu ikorodu axis at leas five in every month if the economy is colapsing then what are the factors that are making these factory to spring up. . Factories are springing up in agbara shagamu ikorodu axis at leas five in every month if the economy is colapsing then what are the factors that are making these factory to spring up.

which Agbara?,

confusion247: Lai should tell us the difference between ACN and PDP. To make the matter worse, the leader of ACN is no other but Tinubu. Nigeria is blessed with corrupt leaders.

Kindly igore the messenger and focus on the substance of the message.

ACN have raised valuable issues requiring critical attention and we all (especially the federal government) need to rise above partisan politics to provide workable solution to the impending doom.

Sadly, rather than put on his thinking cap, GEJ is busy sttategising on how to contest in 2015.

May God help Nigeria.

Oya GEJ apologists, as usual, keep the insults rolling!

Much as these are hard facts, I doubt it will provoke any serious action considering that is it coming from the opposition party who I do not think will do better even if the reins of government were handed to them even without election.
It is quite pathetic that for all these decades we could not move away from the free money that the oil sector provided. The cocoa house in ibadan was built without oil money, but our governors and other leaders have become so lazy and only go to Abuja at the end of the month to share free oil money.
I think we can still save ourselves if we adopt true federalism, no more free money to spend, only then will we bring on our thinking caps.

Well as far as my papa stl dy cllct houserent frm tenants i no go blif ds story

DeCleff: Do we still have a political party called ACN?

Attention seekers

Exactly what was on my mind....... Bunch of confussed fellows!

Omexonomy: . Factories are springing up in agbara shagamu ikorodu axis at leas five in every month if the economy is colapsing then what are the factors that are making these factory to spring up. . Factories are springing up in agbara shagamu ikorodu axis at leas five in every month if the economy is colapsing then what are the factors that are making these factory to spring up. . Factories are springing up in agbara shagamu ikorodu axis at leas five in every month if the economy is colapsing then what are the factors that are making these factory to spring up.

Hope they are not "pure water factories?"

Our leaders should act fast. Corruption should be fought wit all power and might. Budget should be strictly adhered to. And we should begin to adopt Joseph style of economic policy by saving enough for the rainy days. Because weda we like it or not tougher times will come. God help Naija.

This Lai should shut up.Are Action Congress states not over bloated with political appointees?We can never take that clown serious.He is also a political hang on who serve in one of the over bloated Politcal positions.Let him tell us his means of livelyhood.

DeCleff: Do we still a political party called ACN?

Attention seekers

Let the economy collaps so niaja will disintigrate

The arrogance of toxic ignorance!

I expressed similar concern two years ago: https://www.nairaland.com/731115/nigerias-economic-financial-future-within

However, individuals, families and business owners should take pro-active measures. Financial/economic boom and bust circles are inevitable but the negative effects of busts can be mitigated by taking some of these pro-active measures:

1. Save in foreign exchange (£,$,etc) - a measure against the constant devaluing of the Naira.
2. Strive to own your own house(s) - avoid paying rent in old age and possibly own a rental property.
3. Diversify your source of income if possible - a measure against a sudden loss of your only source of personal or business income.
4. Acquire more personal,financial and business skills.
5. Think - there was seven years of abundance in Egypt before the subsequent seven years of famine.

confusion247: Lai should tell us the difference between ACN and PDP. To make the matter worse, the leader of ACN is no other but Tinubu. Nigeria is blessed with corrupt leaders.

your username says it all....U ARE INDEED CONFUSED because u didnt address d issue lai raised,rather u went off point describing tinubu.