of China

In today’s economy, trade is global, trade is war and peace, trade is jobs, trade is culture…..when you look at developed nations, you see nations that have tied the economy of their nation to the foreign policy of their nations…I explain…OPIC i.e. the Overseas Private Investment Corporation the U.S. Government’s development finance institution., however what’s OPIC s role? “Advances U.S. foreign policy and national security objectives nation” no free lunches …..

Free trade is a myth, no nation allows unbridled imports and no nation allow her own national economic interests to suffer, it’s agencies like OPIC that push and sustain the foreign policy of nations via lobbying foreign governments, supporting and promoting the economic ideas of a host nation citizens.

What is then Nigeria strategic economic objective?…..well its oil, crude oil. Even though we want to diversify government revenues, crude oil still funds the budget of the federal government, and pays the salaries of state workers in Nigeria. As oil prices have fallen, state salaries in Nigeria have gone unpaid. Thus the key thing on the mind of any Nigerian President is the price of crude oil and how much output he can push, that the clear and present objective….agricultural and other diversification reforms are funded by the oil and gas sector reform.

Thus while it’s amazing we have not passed the PIB, it’s also amazing the President has not given any strategic level economic policy speech nor reveled an economic team.

We must view this from the prism that crude oil is not looking good…why?

A) At the last OPEC meeting, June 2015, OPEC agreed to maintain current output, this means production will continue to be high and thus prices low…

B).Iran and the US want to make peace, this mean Iranian oil will enter the market,

C) Third China economy is slowing, this means the biggest importer of crude oil in the world is slowing down on purchase of crude oil.

D) Shale is wounded, not dead

This presents a clear and present danger to the economy, assume today there is zero corruption and all dollar earned from oil is paid to CBN, we still cannot fund our budgets, our imports and settle our debt without borrowings….fact.

So my post makes some polite immediate demands of President Buhari

1.       When you select a foreign minister let him/she be one who understand his/her role is to open up the world to Nigerian exports and defend us from imports.

2.       Immediately revel your economic team, and economic agenda. In the end, people will eat bread not anti-corruption. Nigerians need jobs, investors need a certainty, and the economy needs a direction.

3.       Make passage of the PIB a priority, why? Because PIB solves long term the issue of petrol subsidy. Pass PIB, fuel price will go up as subsidy goes via deregulation clauses in the Act, then prices will fall as the International Oil Companies take advantage of the arbitrage opportunists and begin to import petrol. The price hikes will be a short surgical pain to remove a cancer

4.       Go and visit China, with a massive trade delegation. Then appoint a minister for China. President Goodluck Ebele Johnathan was a good friend of China. He gave China the largest oversees contract in Chinese history, the $31b Eastern railway contract from Lagos to Calaber, amongst others. The Largest investor in Africa is China, the largest development bank in the world is Chinese. We need China. China became the largest purchaser of crude in the world however recently China purchases of our light sweet crude has slowed, this is no simple economic coincidence, it’s a message... If you visit G7 and London but not China, then the Chinese will send you a note. China and India as it stands hold to key to Nigeria’s oil future as they remain our biggest buyers of crude oil. Should they stop or reduce their purchasing, Nigeria budget will go into deficit, inflation will rise, bank interest rates will rise, private investment will be choked of, job loses will occur…it has nothing to do with corruption, it’s just economics.

Convert half our foreign reserves to the Yuan, give the Chinese visa free entry, and subscribe to the new Asian Infrastructure &Investment Bank as a founding member….in short woo them. Remember sir, while the G7 gave us hashtags to fight Boko Haram, China gave Nigeria armed drones, and anti-mine APCs.

In summary Sir, there is no time, I won’t list your many promises, but you have promised to create 4.8m jobs by 2016…that’s seven months away.

You have my prayers and support….but you have your work cut out Sir

Its our problem, we can fix it