For The Attention of President Bola Tinubu: Global Political Economy And Nigeria’s Oil Dependency A Call for Economic Diversification
(Global Political Economy And Nigeria’s Oil Dependency: A Call for Economic Diversification and for the Benefits of Students of Political Economy, Politicians, Economic Policy Makers and Interested Readers)
By Abbati Bako,psc,bsis,Alumni-Kent University, UK’s European University
*Introduction:
Research indicates the total amount of the global economy in dollars is a complex figure to pin down, as it encompasses various forms of money, investments, and assets. However, we can break it down into different categories to get an idea of the scale.
*Global Money Supply:
And again, the current research indicates that the total amount of physical currency in circulation worldwide is approximately $8.28 trillion. This figure includes all the notes and coins in circulation across 20 major countries, plus the euro area.
*Money Supply In The World:
When we include demand deposits, travelers’ checks, and other liquid assets, the global money supply jumps to around $48.9 trillion.
*Money Supply:
Adding in savings deposits, mutual funds, and other time deposits, the global money supply reaches approximately $82.6 trillion.
*Global Market Capitalization:
The total value of all publicly traded securities across the world’s major stock exchanges is around $110.2 trillion. Adding in the total market capitalization of cryptocurrencies, we get an additional $2.5 trillion.
*Global Wealth:
The total value of global wealth, including real estate, investments, and other assets, is estimated to be over $1.54 quadrillion. This figure includes the value of all assets, not just liquid cash.
*Analysis of the situation:
Considering the above global economic money, assets and transactions what is the Nigerian position in global economic interplay, growth and development?
Nigeria with deposits of less than $40b in global financial institutions and about $120b worth of debts; one can ask how Nigeria could get out of the current economic conundrum?
Although Nigeria’s debts are not as much as that of the United States of America which is worth about $35T with an accumulation of $2.4b in every 24 hours as interest, hence, debt accumulation is normal in capitalist systems. So, Nigerians never worried. Last year His Excellency the Vice President Kassim Shettima called the attention of global economic stakeholders to erase the Nigerian debts as it did in early 2000 during the leadership of His Excellency President Olusegun Obasanjo.
The current Tinubu’s government has to conduct research on how Brazil under the leadership of President Silver-D. paid its debts to global financial institutions in the early 2000 to 2010?
But the move by the current father of African of Continent General Dr. Olusegun Obasanjo to erase the debts worth about $1.2T by the global financial institutions is an excellent development. This move can make democratic system to firmly stay in Africa and other global South Nations.
*Nigerian Nation:
As the world transitions to a digital economy, Nigeria must adapt to remain relevant. The country’s oil dependency has hindered its economic growth, and it’s essential to explore alternative strategies. This writing examines the Washington Consensus of 1989, the Beijing Consensus of 2004, and the views of the World Bank/IMF to provide insights into Nigeria’s economic challenges. Hence, the Nation’s Economic Council Members must redouble its efforts to ensure the economic growth and development as well as to tackle the stagflation in the country.
*The Washington Consensus and Nigeria’s Economy:
In 1989, over 170 nations, including Nigeria, signed the Washington Consensus, which aimed to promote global economic integration. However, Nigeria’s economy has struggled to keep pace with other nations. The World Bank/IMF has called for Nigeria to remove oil subsidies to improve economic viability. The current government’s decision to remove oil subsidies in 2023 has had mixed results. But if Nigerians realize that the economy is still shrinking; the election year 2027 will be heazy, cloudy and unpredictable to the current government.
*Corruption and Economic Stagnation:
Corruption has plagued Nigeria’s oil industry, with estimates suggesting that up to one-third of the country’s oil is stolen. This has led to widespread poverty, unemployment, and economic stagnation. Despite President Tinubu’s promises to address these issues, it remains to be seen whether his government’s economic reforms will be successful.
*Global Competitiveness and Economic Diversification and Nigeria:
Nigeria’s global competitiveness ranking is 115th out of 144 countries, behind smaller African nations like Ghana, Kenya, and Cameroon. To improve its economic prospects, Nigeria must adopt a radical development strategy that prioritizes economic diversification and reduces its reliance on oil exports.
Nigeria’s oil dependency has hindered its economic growth, and it’s essential to explore alternative strategies. The country must adopt a radical development strategy that prioritizes economic diversification, reduces corruption, and promotes global competitiveness. Only then can Nigeria achieve sustainable economic growth, development and prosperity.
*The Washington Consensus of lead Consultant Professor Williamson
Washington Consensus of 1989 VS Beijing Consensus of 2004 and the views of World Bank/IMF as well as other nations in the global South. As the world is changing to almost everything electronic, Nigeria must take this changing world into consideration especially the soonest changes of the global economic interplay. Nigerian leaders must take note that the rationale behind the election of current US’s President Donald Trump is to twist how to change the global economy. Meaning, before the year 2030 the global economy will dramatically change more in favor of Global North and few Nations in the global South; although George Friedman argues that 3 African countries will be an industrial Nations before the end of this century “South Africa, Nigeria and Algeria” The Next 100 Years, 2009, London.
The death of globalization policy?
Former UK’s Prime Minister Gordon Brown said in 2004 that globalization policy is dead. Can we say globalization policy is now dead or is in crisis due to the changing world’s economic interplay? This writing said several times that one of the principles of globalization policy is global economic integration. Over 170 nations (Nigeria inclusive) signed the Washington Consensus in 1989; especially less advanced Nations of Africa and Latin America or the called Global South.
Nigeria’s economy is still lagging behind in global political economic inter-play. It was sometimes a go that the World Bank/IMF called for Nigeria to remove oil subsidy for quick and better economic viability (the current Tinubu’s government removed the oil subsidy in 2023 and what is the result in the country far?).The oil price at the global market has been fluctuating since 2014. Nigerians have been at the mercy of oil marketers for decades; and very few cabals benefit from the shady business that has been characterized by connivance, stealing and corruption. And again, fortunately or unfortunately, transportation is the cornerstone of the global economy and oil is the prime mover. Without oil the economy will be stagnant not only in Nigeria but globally. Although Nigeria’s oil Chief Mele kyari said long ago that Nigeria will stop importing refined oil by 2023 and (indeed) the reality is here. Dangote Refinery is in existence and oil prices seem to be coming down, also other refineries are on the way kudos to Abdussamad Isyaka Rabi’u of Chairman BUS group for establishment of another refinery in Akwa Ibom state. Meaning that, competition will change oil prices.
*The corruption and the lingering economy:
Even the Dasuki-gate of massive corruption in Nigeria has been via the NNPC organization. Nigeria’s “official” oil production figures show about 3 million barrels a day (during PDP’s 16 years rule) being pumped from their oil fields into the holds of thieves-tankers though for decades now informed observers have estimated up to one third of all Nigerian oil is actually “stolen”, secretly loaded onto oil tankers after bribes are paid to corrupt government officials. Although this writing understand that Nigerian Army are doing their best to tackle the situation.
Nigeria should be wealthy, its people should be envied in Africa if not the entire developing world. Instead its cities are filled with homeless children begging for their daily bread. The nation has been characterized by poverty, corruption, stealing, illiteracy, insecurity, unemployment, stagflation, hunger and diseases. Nigeria has been in a sorry state for the past 25 years of democratic system and the system has not been able to remedy the negative situation. But the current President Tinubu’s promises to solve Nigeria’s economic problems can the promises be fulfilled before 2027?
*Economic Competitiveness in Africa:
“Despite a series of reforms to improve the economic conditions and business competitiveness in Nigeria, the country still trails smaller African countries like Ghana, Cameron and Kenya in global competitiveness.The Global Competitiveness Report (GCR) Index 2020-2023 released by the World Economic Forum (WEF) indicated that Nigeria ranked 115th out of 144 countries assessed – behind Ghana, Kenya and Cameron, which ranked higher at 103rd, 106th and 112th positions respectively. Only the Benin Republic trailed Nigeria with a ranking of 119th while South Africa ranked 52nd globally, making it the most competitive in the African Continent”.
There is the need for radical re-thinking on serialize development strategy (based calendar time frame) is imperative for Nigeria to be relevant in the global economy. This is further reinforced by the reality of extreme poverty in the country. Over the years, the share of Nigeria in global trade activities remained insignificant despite the implementation of the policies that were recommended by international financial and development institutions, such as the International Monetary Fund (IMF) and the World Bank.
The performance of Nigeria in economic inter-play among the comity of nations calls to question the effectiveness of the economic ideologies being prescribed by international institutions, and points to the need for a paradigm shift in order to achieve sustainable development in Nigeria and other African nations. This writing subscribed to the view of professor Paul Collier of Oxford University, London that for African nations to have economic prosperity “accountability and economic discipline must be introduced” London, 2009. Hence, is the current President Tinubu’s government economic reforms a success or failure? The assessment will reveal itself before the end of 2025.
*Global Digital Economy
As the world transitions to a digital economy, Nigeria must adapt to remain relevant. The country’s oil dependency has hindered its economic growth, and it’s essential to explore alternative strategies. This writing examines the Washington Consensus of 1989, the Beijing Consensus of 2004, and the views of the World Bank/IMF to provide insights into Nigeria’s economic challenges.
To be continued insha’Allah
Abbati Bako, political strategy and communications consultant, IPRC, Nigeria and global political analyst and student’s mentor @Kent University and treasurer Kano Chamber of Commerce: abbatibako@gmail.com Gsm+2349077889959
