Falling oil prices, serious challenge to Nigeria –Campbell

A former United States ambassador
to Nigeria, John Campbell, has
raised the alarm that current
situations in Nigeria, especially
falling oil prices, are making it
difficult for the country to avoid
disintegration.
He stated that apart from the Boko
Haram insurgency plaguing the
country, the falling oil prices posed
a new challenge to the Federal
Government.
Campbell also noted that any
attempt by the President Goodluck
Jonathan administration to pursue
policies of austerity could lead to a
protest similar to that of the oil
subsidy removal in 2012.
The Ralph Bunche Senior Fellow for
Africa Policy Studies writing on the
Council on Foreign Relations
website said, “National elections
are scheduled for February 14, 2015.
Elections are the occasion and the
venue for competition, often
violent, among Nigeria’s fractured
political elite. In the past, abundant
oil money provided a means to
resolve numerous conflicts, to
literally ‘grease the skids.’ Now,
there is less money available.
“Nigeria has benefited from an oil
boom since the end of military rule
in 1999. Prices rose from $10 per
barrel that year to $140 per barrel
in 2008. As late as June 2014, they
remained above $100. However,
since June, oil prices have fallen by
more than 30 per cent. It is unlikely
that they have reached bottom.”
According to him, the FG may be
reluctant to approach international
financial institutions for assistance
because of the likely requirements
those institutions will impose on it.
“The confluence of declining oil
prices and government revenue, a
failing effort against Boko Haram,
and contentious national elections
in two months is making it harder
for Nigeria to pull back from the
brink,” he said.
The former US ambassador to
Nigeria stated further that a major
cut in oil production by the
Organisation of Petroleum
Exporting Countries, led by Saudi
Arabia could cause oil prices to
recover to the $100 per barrel level.
Campbell also noted that Nigeria’
dependency on oil was “now
stirring serious concern throughout
the country’s political class.”
“Among other things, a whole array
of government expenditures
associated with petroleum play a
major role in sustaining the
cooperating and competing
patronage networks that run
Nigeria. Absent this political
lubricant, the country’s already
unstable political situation
promises to get worse just two
months ahead of national
elections,” he said.