Written By:  Patrick Okigbo

Anyone who is in position of authority and responsibility in Nigeria that is not already working round the clock, night and day, is playing with fire. The reality is that Bonny Light, Nigeria’s crude oil, is trading at about eleven dollar per barrel. This is half the cost of producing the barrel.

Even at that price, Nigeria is not able to sell her crude oil. She has tens of millions of barrels of crude oil in scores of vessels cruising the seas, like a hawker in Onitsha traffic, looking for customers. No one is calling; no one is buying. Nigeria is offering a $5 discount per barrel but who will buy when U.S. shale oil is selling for $2 (and no one is buying that either).

Nigeria has other bigger challenges. It does not have onshore crude oil storage, so she has to put her oil on vessels. In the last week, the cost of renting the vessels doubled to three hundred and fifty thousand dollars per day. Over the weekend, Canadian oil hit minus three dollars. They, too, are not selling. Why? China – the factory of the world – is running at a fraction of its capacity.

The airlines, farms and factories are shut down. Many analysts are saying that the world may not get back on its feet for a few more months. In reality, we may be stuck in this new world until a vaccine is found for the novel Coronavirus.

Why should we care? The world has changed and nothing has prepared us for what we are about to experience. All state governments, except Lagos, depend on allocations from the sale of Nigeria’s crude oil for most of their revenue. The Federal Government allocations to the states have started dropping and it might get worse.

The catastrophe is close at hand but there is still some time to lay the sandbags. This is the time to get into emergency mode and plan for the worst. What will you do when it becomes obvious, in a few weeks, that states cannot pay salaries and provide the basic minimum public services required? What are the economic choices to make today? What things should states cut off today to be able to tide over tomorrow. How are we going to balance this elephant on the top of a needle?

States and institutions should set up “war-room” now. Pull in the best thinkers. Borrow from other states and institutions, and outside Nigeria, if need be. We must reach out to everyone who has a voice. The best solution may be to convince the people, instead of through coercion.

Let’s decide who is in the best position to convince the different groups of people. This is no time to be partisan. We should turn this problem into a shared one. Let no one brand it the president’s, governors’, or institution’s problem alone.

We must plug the leakages in the system and call on illustrious sons and daughters, and friends of the state and institution and convince them to join in planning for and in funding palliatives for the poor and vulnerable.

This is the time to plan and act. We must act as if we are convinced that the dam will break. It is more than likely that it would. If it doesn’t, we will still be ahead. If it does, we will be ready. We should not be caught napping. It would not be pretty.

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