Coronavirus, Oil Slump: Nigeria Worst Hit With Mono Economy

Ike Ekweremadu


Former Deputy President of the Senate, Senator Ike Ekweremadu has said that the global pandemic, Coronavirus, and the dwindling oil price will hit Nigeria most hard because the country operates a mono-economy, dependent only on oil.

Ekweremadu said that if the country was economically restructured, the two global impacts would not have been felt by the entire country since the 36 states would have been operating 36 different economies, based on their comparative advantages.

He forecasts that if the pandemic with its attendant slump in oil price continues, Nigeria would find it difficult to pay salaries in the next four months.

Ekweremadu also suggested that since most Nigerian’s were traders and the country a consumer nation, government may have to augment the traders purse that would have become lean when Coronavirus would have finished ravaging, due to the lockdown in economic activities.

“On the issue of Coronavirus, most of our people are traders and we are consumer nation. Now that most of the factories in Asia and Europe are closing and we are selling our last items in the shops. When that happens, I am not sure of refilling the stock and our brothers and sisters will start eating from their capital. So anytime the factories resume, I would like to appeal to the government to find a way of having packages for them,” Ekweremadu suggested.

He made the statements at the maiden Annual Lecture of the Faculty of Law, Nnamdi Azikiwe University, Awka, delivered by the President of the National Industrial Court, Justice B.B Kanyip, in Enugu on Thursday.

The former Deputy Senate President blamed the immediate adverse effects of the slump in oil price on Nigeria, on the refusal to structure the nation as a federal state to diversify the her economy, adding that the implication was that rather than enjoying about 36 economies along the federating units, Nigeria was stuck with a mono-economy driven by oil.

Ekweremadu said “It is no longer news that a combination of the Coronavirus pandemic and the crude oil price war between Russia and Saudi Arabia, is already taking huge tolls on our economy and the 2020 budget. Whereas our budget was hinged on $57 oil benchmark, the price of oil crashed further to $24 on Wednesday.

“The Organisation of Petroleum Exporting Countries, OPEC, and the International Energy Agency, IEA, have equally predicted that Nigeria and other developing countries, which rely heavily on oil revenue are set to witness a decline as their income from oil and gas is projected to fall by between 50 percent and 85 percent in 2020, reaching the lowest levels in more than two decades. Already, the value of naira is tumbling down.

“Obviously, our past, our rebuffing of all advocacies and constitution amendment efforts to provide for compulsory savings from our oil earnings, entrench fiscal federalism, devolve powers, and restructure Nigerian economy have caught up with us, once again.

“If there is one lesson we will have to learn the hard way, it is that ‘feeding bottle federalism’ does not pay. Ordinarily, we should have been talking about 36 economies based on the federating units. But we can only talk about a mono-economy driven by oil.

“It is my hope that when the impending economic tsunami settles, we will see the need to diversify the economy, and we will see that there is no better way to do so than to entrench real fiscal federalism to unleash the economic potentials and comparative advantages of the various federating units.”

Delivering the lecture on the theme “The Law’s Treatment of Economically Disadvantaged Groups: The Need for Alternative Emphasis in Commercial Law,” President of the National Industrial Court, Justice Benedict Kanyip, reminded the government that the nature and degree of consumer protection regulation in any modern society says a lot about that society, its values, sense of justice, priorities, as well as social, political, and economic development.

“The point I seek to make is very simple: Because the law looks into virtually and only the commercial prism of transactions, the economically disadvantaged individual in those dealings is almost always never contemplated. What we end with is a legal/judicial subsidisation of the liability rules in favor of the very powerful groups. “In other words, when it comes to liability, the rules are skewed in favor of the powerful, against the weak. So, each time some kind of paternalism is suggested for the law, this becomes the underlying reason.”

He emphasised the need to properly deploy the law towards better protection of the consumers and the economically disadvantaged.

Also speaking, the Dean, Faculty of Law, Nnamdi Azikiwe University, Prof. Meshach Umenweke, and Chairman, Faculty of Law Lecture Series, Prof. Offornze Amucheazi, pledged the Faculty’s commitment to sustaining the lecture series to better the society and Nigeria’s democracy.