Opinion
Hello Venezuela!!!
It is not news that Nigeria is rapidly sliding down a slippery economic slope to where Venezuela is, today. It is not also news that Nigerians are living in denial of this obvious fact; a rather defeatist disposition. The projection is that if the current trend is not halted and reversed, Nigeria will sink into bankruptcy by 2026. Where is Venezuela and in what situation is she? Located on the northern coast of South America, Venezuela consists of a continental landmass and many islands and islets in the Caribbean Sea. It has a territorial extension of 916,445 km2 flanked on the east and west by Guyana and Colombia, respectively, with its southern neighbour being Brazil. Venezuela has an estimated population of 29 million; Caracas is the capital and also its largest city.
Venezuela has the world’s largest known oil reserves and has been one of the world’s leading exporters of oil. Previously, Venezuela was an underdeveloped exporter of agricultural commodities such as coffee and cocoa, but oil came and dominated exports and government revenues. Poor public policy conceptualisation and implementation and brazen corruption resulted in the collapse of Venezuela’s entire economy. Currently, Venezuela is in decay and has been declared in default by credit rating agencies. The crisis in Venezuela has contributed to a rapidly deteriorating human rights situation, including increased abuses such as torture, arbitrary imprisonment, extrajudicial killings and attacks on human rights advocates.
The severity of the shortages and socioeconomic and security challenges have led to more than three million Venezuelans fleeing the country, leading to the largest refugee crisis ever recorded in the Americas.
From the above background of Venezuela, we note the following commonalities with Nigeria: (1) originally, great exporter of agricultural produce, (2) then, oil entered with stupendous wealth, (3) abandonment of agriculture (4) poor leadership resulting in faulty conceptualisation and implementation of public policies leading to (5) corruption, (6) widespread poverty, and (7) social disorder and insecurity In our insistent and persistent drive towards Venezuela, Nigeria earned N970.3 billion from oil, N1.6 trillion from non-oil taxes [more revenue than oil] and N2.8 trillion from a cumulative of other sources in 2021.
In total, the country’s revenue amounted to N5.5 trillion. Now, put on your seatbelts for a bumpy analytical ride: out of that N5.5 trillion revenue, N4.2 trillion was spent on servicing (repaying) debts incurred from January to November. This leaves a balance of N1.3 trillion obviously, this balance is inadequate to run the country because in the 2021 national budget, the nation needed to run on a total of N13.57trillion. Elementary arithmetic shows that there is the need for an extra N12.27 trillion which can only be obtained in the global money market by BORROWING with stifling interest and strangulating strings attached. In the same year Nigeria spent N12.56 trillion (most of which were borrowed) on salary, fuel subsidy, LOOTING, etc., which are things that do not bring money back. Nigerians do not seem to realise how critical 2023 election is.
That is why political office seekers do not focus on issues that matter and, tragically, the generality of the electorate have failed to insist on issues-based campaign rather than empty political sloganeerism and politicisation of religion and ethnicity. The point remains that Nigeria desperately needs a president with proven disposition and competence to nurse the ailing and hemorrhaging economy to recovery. Nigeria has been ranked 103 out of 121 countries in the 2022 Global Hunger Index, a position that signifies that the nation “has a level of hunger that is serious.” Within one year alone, the Naira has declined from N415/dollar, which was already very bad at the time, to a whopping N820/dollar, and still declining. In a satire, a financial analyst captured Nigeria in a metaphor of a man who earns 100k per month and borrows N5 million monthly to pay utility bills and run the household. Not only does this man borrow like a crazy person, he has no savings for emergencies such as ill health etc. The rule is that no country should borrow more than 40 per cent of its GDP and, currently, Nigeria is at 36.9 per cent, which leaves the marginal room of 3.2 per cent after which the alarm clock will go off. Persistent revenue drop as the economy is experiencing and unrelenting borrowing spree will, sooner than later, bring the nation to 3.2 per cent and tip the economy over the 40 per cent of GDP milestone. It will then be “Hello Venezuela!!!” Meanwhile, the finance minister thinks that what we have is a revenue problem – and not a debt problem and if we sell more oil we will be alright.
Since the economic crisis in Venezuela, 7.5 million Venezuelans have taken refuge elsewhere.Given a National population of 28.2 million, 7.5 million reflects approximately 25 per cent of Venezuela population. Apply this percentage to Nigeria and we will contend with 54 million Nigerians seeking refuge outside. Now, the population of Nigeria’s neighbours, moving clockwise from Benin Republic is as follows: Benin (12.8 million), Niger (26.2 million), Chad (17.5 million) and Cameroon (28 million). These figures add up to 108.1 million, which is slightly below fifty percent of Nigeria’s population of 217.8 million. Sticking with the comparison with Venezuela, if 25 percent of the Nigerian population (54 million) spills into the neighbouring countries, that will precipitate huge refugee crisis in the West African subregion.
The tragedy is that whereas the United States of America, in its magnanimity, has opened its doors to streams of thousands of Venezuelan refugees, Nigeria’s neighbours are incapable of accommodating the deluge of refugees that such socioeconomic crisis will belch out. Obviously, xenophobia (Nigeria-phobia) will be instantaneous. In a 1984 hit song that captured the state of confusion in the nation, Sunny Okosun rhetorically asked “Which way Nigeria?” Today, we are obviously more confused than we were almost four decades ago when that thought-provoking question was asked. February 25, 2023 provides a veritable opportunity for Nigerians to decide which way to go. Nigerians should know that once a decision is made that day, we will all live with the realities of its outcomes for four years.
By: Jason Osai
Prof. Osai lectures in Rivers State University
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