Many people wonder why any adverse development in the global economy quickly impacts Nigeria. A recent example is the tension involving Iran, which led to an increase in global oil prices and, subsequently, a rise in petroleum prices in Nigeria.
A few weeks ago, petrol was selling for less than ₦1,000 per litre, but today it costs over ₦1,200 per litre. Diesel, which was also priced below ₦1,000 per litre, is now over ₦1,500 per litre. These rapid increases illustrate how quickly external shocks can affect the Nigerian economy.
The reason for this is straightforward: most countries, whether they are oil-producing or non-oil-producing, maintain strategic petroleum reserves to cushion against supply or price shocks. This means that when there is a disruption in the global oil market, they can release part of these reserves to stabilize supply. However, Nigeria lacks such a buffer, so the impact is felt almost immediately.
The underlying issue is a lack of planning. Countries that engage in planning create buffers against shocks, while those that do not remain vulnerable to them. The old maxim remains true: when a country fails to plan, it has already planned to fail.
A New Nigeria is POssible.
- PO