Adieu to Mohammed Ali, the greatest.

I feel compelled to chime in my non-economist opinion to the on-going discussion about the dire economic hardship currently facing Nigeria and Nigerians. I have not spent the time to arrange/re-order my thoughts below (apologies for that).



Over the past 18+ months, I have often wondered (and luckily, I discussed my concerns numerous times with Engr ABC, so he can corroborate as needed) how Nigeria has managed to hide or mask the effect of the drastically reduced price of crude oil. Nigeria, at least until now, is a mono-commodity (crude oil) economy. The selling price of the commodity fell (literally overnight) by over 70%. The cost of production (however low it may be relative to the rest of the world) remained virtually the same as before. This meant all of the 70% reduction of the selling price must be accounted for on the profit side of the simple arithmetic equation. Because of the 2015 elections, Nigeria and Nigerians wanted the status quo to remain. No belt tightening. Nigerians in the upper class continued to live like there was no problem. Stealing of the dwindling public resources continued unabated. People continued to send children (most of whom were not the stellar performers in their classes) to various overseas institutions, at prohibitively expensive costs. I know many Nigerians (living in Nigeria and earning Naira) who send their underage teenagers to American/foreign Universities/Colleges where tuition fees alone are in excess of US$70,000 per year. Parents make several “frivolous” trips to visit the children, and often boasting they only travel 1st/business class. People still throng to Dubai, Europe, Asia and wherever for no economic reasons, even though their primary income is still Naira. By the way, in my almost 30 years outside of Nigeria, I have yet to hear one single Oyinbo person tell me s/he traveled on 1st/business class for vacation. That is simply a Nigerian “boasting” phenomenon.
Contrary to the above Nigeria/Nigerian handling of the fall of oil prices, I will give you examples of what we have gone (and continue to go) through here in the province of Alberta, in Canada (the equivalent of Nigeria’s Niger Delta). Bear in mind that Canada is not a mono-economy like Nigeria:
In the past 18 months, over 100,000 people have been laid off from their employment, in a province of about 3million people. That is directly in the oil & gas sector, not accounting for the spin-off effects.
Many (about 70%) of those directly affected are engineers, some with Masters and Ph.D degrees. I, personally, know at least 10 Nigerian/Canadians with engineering Ph.Ds. Most of the layoffs were from reputable and large companies such as Shell, Chevron, ConocoPhllips, StatOil, Schlumberger, Baker Hughes, Haliburton etc. Most of those laid-off remained unemployed till now (I know those who have been unemployed for between 6 and 27 months now).
Vacancies of office and retail spaces in Calgary is now at its 20-year high, at around 20%.
Immediately obvious spin-off effect of the above is very evident in the EPC industry, where almost all the big players (except Fluor) have just about closed their shops.
Foreclosures on mortgages and personal bankruptcies are at alarming rates.
As things stand here right now, many qualified engineers are unable to find a clerk/cashier’s job at Walmart to make ends meet.

Nigeria’s problem is, even now, more compounded by the disruption of oil production, to as low as half (or lower) its previous daily production.

Many Nigerians are in the habit of buying clothes for Owambe parties every weekend. We are never a moderate set of human beings; always struggling to out-do each other, on mundane and non-sequitur things. Lots and lots of money burned/wasted every day/weekend on unproductive/frivolous parties/events/celebrations etc. Not to talk of the amount of money literally burned every day and night in fuelling generators in homes and offices.

Recently, I read that the Minister of Labour (Ngige) is asking the banks to stop retrenchment. How practical is such directive? Is he/the government going to help the banks pay the salaries? We asked the banks to cut/reduce COTs and other charges (which I agree with). This led to the drastic reduction in their previously usury-type revenue. Should they not then be freely allowed to balance their books by retrenching redundant workers and cutting their costs? Same goes for all arms of government (local, state and federal). What is the point of an employer owing employees over 6 months salary, just to say they are not retrenching? As has been said by many (including Engr ABC??) in the past, many of our government arms, especially the non-productive states, are economically unviable!!!

The ominous signs are all over. I do not want to be a prophet of doom, but I must side with TB Joshua and others on this one, that it will still get worse in Nigeria before it starts getting better. Currently, our priorities are all in the wrong places. Our emphasis are more on fluff and less on substance. An average Nigerian is more concerned about his/her appearance, and how s/he can oppress the next person than about the reality of his/her economic and productivity position. The same goes on at all levels of the society, even at the low end of the economic scale; otherwise how do you explain the slogan “I better pass my neighbour” used for describing the ownership of 500Watts generators worth the equivalent of a mere$100, capable of powering one light bulb, fan and maybe a radio or small TV?

Regards.
Adeniyi Akanni

http://newsafricanow.com/2016/06/non-economist-opinion-going-discussion-dire-economic-hardship-currently-facing-nigeria/