The decreasing oil revenues in the international market at a time of mounting government expenditure have become a hitch to the developmental aspiration of the present government.
Over dependence on oil, Major General Muhammadu Buhari was with high hope to rejuvenate Nigeria when he mounted the saddle as president on May 29, 2015.
But little did he know that the heralded dwindling oil price in the past administration will misdirect his views and posit his government as one without a direction.
Crude oil price is today, no longer doing over $50 per barrel in the international market, whereas oil, fees for almost 15% of Nigeria’s GDP but creates up a-propos of 80% of government income.
There is triple re-establishing of the 2015 budget from 78 USD/barrel to 52 USD/barrel.
The economy has been terrified into a condition of deficits; other sectors of the economy are affected.
Nigeria nearly quitted the world market due to the current economic circumstances.
But Buhari on February 15 2016, at the Aso Rock Presidential Villa, when he received the Director-General of the World Trade Organisation (WTO), Ambassador Roberto Azevedo, reassured Nigerians that the country remained fully committed to free international trade.
There is apprehension that the low oil prices, which started in the second half of 2014, will likely continue up until 2019.
However, the president seemingly made things to constrict when by September 2015 his government did not make appointments of people into key positions of the energy sector or reveal his plan for the sector.
The country is freshly in dire need to meet its financial obligations and many oil and gas projects have stopped.
About 500, 000 workers have been sacked and investors are remaining on the side line since the oil decline hit the country.
Whereas, countries like Saudi Arabia, Kuwait and the United Arab Emirates can boast of over $2 trillion in Sovereign Wealth Fund, SWF, accounts with which they have been protecting their economies not to down-spiral in the face of the oil catastrophe.
There are cases where Federal Government’s inability or refusal to fund the Joint Venture budgets and expenditure stalled other oil and gas projects and operations, and delay in the passage of the Petroleum Industry Bill, PIB.
Nigeria which apparently has refused to save saw in March 2016 her many road projects stopped.
For example, the Yenagoa-Obogoro-Oporoma Road in Bayealsa State was stopped, as a result of dwindling economy which is as a result of low oil price.
Until the road project was stopped, it was noted that this road had been on the federal government’s project since the sixties without any people-oriented result seen on it till Governor Seriake Dickson of the state took the bull by the horn and awarded the job to a Chinese firm, China Civil Engineering Construction Corporation, CCECC, at the cost of N31 billion.
There is also an indictment by March 2016 that from 2011 till date, the successive governments’ lackadaisical approach to things has resulted to the deadlock in achieving anything meaningful in multibillion dollar Bonga South-west oil and gas development, since there is no Final Investment Decision (FID) on the project.
The latter is estimated at $15b with flattering investment between $2b and $3b by suppliers and subcontractors.
The Bonga SWA project when ready, was expected to garner some $50 billion net revenue to the Federal Government over the 2016-2021 construction stage of the project, and extra $3.5 billion revenue through contractor taxes.
The expected 3,500 direct jobs and 15,000 indirect jobs it was intended to create through Significant Nigerian content and employment creation during construction, may be hitting the dustbin.
In November 2015, the immediate past National Industrial Relations Officer, Petroleum and Natural Gas Senior Staff Association of Nigeria, Hyginus Onuegbu made it known that 120,000 direct and indirect jobs have been cut.
It has become worse with the economy because the country has not given much attention to how industries are run in the country.
A case-in-point is where industry budget is killed by 40 percent, thereby dampening the spirited plans of industrialists.
A topmost bureaucrat with the National Petroleum and Investment Management Services Company, NAPIMS, would say that due to low oil prices, multinational oil companies in Nigeria that include Shell, Mobil, Chevron, Total and Agip have been showing their workers the exit door.
The same is the fate with engineering, fabrication, and construction companies.
In the recent past, the Royal Dutch Shell said that it was headed to cutting 6,500 jobs in Nigeria and reduces its capital spending by 20 per cent pending when things improve.
There is 72 percent fall in quarterly profit, after the $54b acquisition of BG Group by Royal Dutch Shell “showing how much strain it faces after the bumper deal.”