Lake Chad Oil Exploration: Does Buhari Lack Simple Economics Basics ?

"The administration of president Muhammadu Buhari has plans to extend oil and gas exploration into new fields in the Lake Chad Basin in the North East and in the coastal states, like Lagos, where oil has been discovered in commercial quantity ", is a statement made by
the Vice -President of Nigeria , Prof Yemi Osibanjo on Tuesday while  declaring open the 6th African Petroleum Congress and Exhibition (CAPE VI) being hosted in Abuja.

While such a statement will arouse excitement from ignorant Nigerians, it only saddens those who have a broader view of the economic travails of the country . The problem is that  at a time oil prices have fallen to a record low of below $35 per barrel from it's high of $100 and excess per barrel, which has dealt a big blow to the economies of oil producing nations . This has also come at a time the country is yet to diversify it's source of revenue relying extensively on oil products which generates more than 95 percent of the country's revenue. This is contrary to the economic practice in other oil producing countries like United Arab Emirates (UAE) and Saudi Arabia who also earn revenue through tourism, hence relying less on oil. With such statement and plans by the present government it is clear they are yet to learn the lessons of modern times and diversity the economy .

While there is absolutely nothing wrong in oil and gas exploration in these coastal areas and Lake Chad Basin, as it could be said to broaden the revenue from foreign exchange as a result of increase in oil sales. The main issue at hand is that the country can no longer depend on oil to survive. Oil as it can be said might have turned a "curse " to the country since it's discovery in Olobiri in January 15 1956.

Also to be noted is that the Western Government of Sir Obafemi Awolowo successfully developed the then Western region with cocoa sales. The physical examples include that of the Nigerian Television Authority   (NTA Ibadan) , Obafemi Awolowo University ( Then University of Ife) to mention a few. This clearly shows that though it might be slow and initially painful , diversification of the economy is what we really need right now. There is absolutely no need at present to nurse the idea or plans of oil exploration when the buyers of crude oil are scarce and our refinery working below capacity .

The Nigerian refineries are still not producing enough refined crude oil to satisfy the country , hence the nation depends extensively on lifting of crude oil to foreign countries, sale and purchase of refined oil. This is clearly not cost effective and is like a weight draining the purse of the country . The present government has not fulfilled it's promise of repairing the refineries and also the naira is almost worthless in the international market . To achieve a balance of payment  surplus then oil should be complimented with other minerals or natural goods .

Buhari and his economic teak including an academic professor have clearly got this one wrong as it is glaring to all to see. A simple understanding of the basics of economics could have done their world a few good if the jettisoned their plans and diversified the economy .