Will the world ever miss Nigeria for anything? - By: Vincent Nwanma | Dailytrust

Will the world ever miss Nigeria for anything?

On Monday, August 1, 2022, M/V Razoni, loaded with 26,000 tons of Ukrainian corn left the largest port, Odesa, after 158 days of blockade by Russia. It was wild jubilation for the United Nations, which brokered the deal, alongside Turkey, for Russia to remove the blockade and allow Ukraine to reopen the export of its grains, cooking oil and fertiliSer through the Black Sea ports. 

While Turkish neutrality in the war between Russia and Ukraine gave it some influence with both warring nations to negotiate the deal, the stance of the United Nation may be different and it’s objective for leading the bargain was simple – it was an inevitable move to address the growing global food shortage. Indeed, the deal was celebrated across many countries, with smiles and excitement on the streets of Lebanon, where the grain was headed but not just the Lebanese are jubilating, many countries, including African nations such as Sierra Leone, are earnestly expecting their turns of Ukrainian grains in the months ahead. 

Ukraine’s gross domestic product of approximately USD200 billion ranks it the 55th largest country in the world, behind Nigeria’s 27th position. Its 40 million population (compares to less than one-fifth of Nigeria’s approximately 211million people), and its 603,548Km2 land size (versus (23,768Km2) do not place this European country in any geographical vantage position.  Ukraine is renowned for being one of the largest exporters of food in the world, alongside its warring neighbour, Russia. 

According to Axios, some countries like Libya, Madagascar, Netherlands, and China depend on Ukraine for over 50 per cent of their maize imports whilst Niger, Kenya, Taiwan, Benin, and UAE get over three-quarters of their sunflower oil imports from this supposedly small agrarian nation. With its export falling to barely a sixth of pre-war average, the United Nations says some 47 million people are now at the stage of acute hunger across the world. The United States of America and its Euro allies are not supporting Ukraine because they are “blue eyes” people, as some activists fighting against some Danish discrimination favouring new Ukrainian migrants over their permanent residents and even “non-blue eyes” citizen qualify them. 

The U.S and European allies are standing by Ukraine because the war has stoked unprecedented food inflation across the world, including in countries that do not import grain from Ukraine, because of the domino rationing effect of the inability of Ukraine to export food to the world. Indeed, the impact is simple to conceptualise. Prior to the war, Ukraine accounted for some nine per cent, 15 per cent and 44 per cent of global wheat, maize and sunflower oil exports, respectively, staple foods that the world incredibly depends on for everyday consumption, given that these are composite food with numerous derivatives. 

Whether you are white, black, or Asian in Africa, Europe, America, or Asia, you cannot avoid this important food, and of course, Ukraine is a major basket through which several million, if not billions of people across the world feed. This is why the effect of the war is like no other on global food prices. Yes, lagged impacts of the COVID-19 pandemic and supply chain disruptions are a major factor for rising food prices, but the war in Ukraine added more vista to the inflationary pressure than one would have ever expected for a country of “barely” 40million people. 

So, let’s turn to Nigeria. There was a time when, if the Nigerian oil industry sneezed, the global energy market caught a cold. In those days, Nigeria was the fifth-largest super of crude oil to the United States. With that, a disruption to oil production in Nigeria was a direct hit on the American economy. Thus a strike by Nigerian oil workers, even a mere announcement of it, was sure to raise the price of oil. When oil pipelines got ruptured in Nigeria, that sent our price rising. 

How do we fare in this market today? Are we still a force to reckon with in the industry? What is it that this well-endowed country is best at today that the world would count on us for? Amazingly, we have retrogressed from being a market mover to a price taker in the oil industry. 

In a certain year in the early 2003 stories on a Nigerian oil industry strike written by this reporter, working them for a wire service, moved the price of oil for 10 consecutive days! As NUPENG declared the strike, oil prices jumped. When PENGASSAN joined, the prices jumped higher. When negations started between the government and the unions, the price moderated, but when a deadlock ensued, the price went up again. This continued till the strike was called off. That jig-saw movement represented, not only the power of the market but also the weight that Nigeria exerted then on the global oil market. As reports about the escalating strike hit the screens on the trading floors of commodities exchanges, traders bellowed “Buy, Buy” orders. They scrambled to secure future supplies and doing so meant offering higher prices since the output from a major producer had come under threat. 

Nigeria has lost that position. We have lost it for not being strategic enough. From being a price giver, we are now taking prices dictated by fellow oil producers. That explains why, though an oil-producing nation, we could not take advantage of the current high price of petroleum products thrust upon us by the Russia-Ukraine war. 

We have not only failed to take advantage of it; its consequences continue to ravage our economy. Our headline inflation rate rose last month to a 17-year high of 19.64 per cent, driven mainly by energy and food prices, two of the biggest fallouts of the war. 

Industries are reeling from the high price of diesel; consumers are returning from markets with long faces. The food items they bought two weeks ago are now beyond their budgets. There is hunger in the land. Pray, what has happened to us? 

 

Dear Reader,
Every day, we work hard to provide readers such as you with the most accurate, up-to-date, and comprehensive information. Quality journalism costs money. Today, we're asking that you support us to do more. Your support means that Daily Trust can keep offering journalism to everyone in the world. Sign up for as little as N1,000 to become a member. Learn more about our membership here

Bank transfers can be made to:
Zenith Bank
1017257739
Media Trust Ltd


Please send details of your bank transfer to the email or Whatsapp number below so that we can contact you.

If you have any questions, please let us know.

Inquiries:
Email: membership@dailytrust.com
Whatsapp: +234 806 990 3410