An indication from the COVID-19 pandemic is that global demand for crude oil may never be as high as before, especially with bio-fuel solutions, electric cars and solar power machinery worldwide. How true is this?
Please, permit me to commend the government both at the federal and state levels for the pragmatic ways they have managed the pandemic. But for the various measures and steps taken by our leaders so far, we would have experienced an astronomic increase in the number of infections and deaths. My heart goes out to those who are infected and those who have lost their loved ones to the pandemic.
Now, to your question, it is very true that the pandemic has reduced the need and demand for fossil fuel to an all-time low level and consequently, the free fall in the price of crude oil. Reacting to this development, major oil-producing countries have reduced production levels, hoping that the subsequent scarcity of the product will result in significant increase in price. While it sounds logical, the fact that more and more countries are discovering crude oil in commercial quantity and are exploiting same for economic gains should not be jettisoned as this indicates that the supply basket is growing, perhaps at a rate faster than the global demand for the product. And, that implies a negative impact on the price of the product.
Moreover, even before the current pandemic, the world has begun to shift attention from fossil fuel to cleaner, renewable and more climate-friendly sources of energy. Some cities and countries, especially in Europe, for instance, have placed deadlines on the use of diesel and petrol-powered vehicles before now. Without being pessimistic, one should not expect that the global demand for crude oil will recover and remain high for a very long time even if it recovers.
What does this imply for a nation like Nigeria?
For Nigeria that depends so much on earnings from crude oil, this implies dwindling national revenue that may result in poor funding of sectors like agriculture, health, education, infrastructure, and consequently lead to more deplorable conditions in the livelihood of citizens. This means that there is an urgent need, more than ever, to diversify the economy through alternative sectors where we have comparative advantages, particularly agriculture, which was the mainstay of the economy before crude oil.
How can Nigeria best address the negative impacts of this COVID-19 pandemic which includes drastic decline in national revenue and resultant shortfall in productivity, food insecurity and inflation, among others?
Adverse effects of the pandemic on Nigeria’s economy can be mitigated by boosting local production with consumption of locally produced goods through taxes and tariffs; by diversifying the nation’s economy from oil into other sectors such as agriculture, manufacturing and solid minerals; by fixing the nation’s power sector, and by export of processed products instead of raw/crude products.
While the whole world has turned its focus on containing the pandemic, global trade has shut down. This means farmers would not have access to fertiliser, pesticides and other farm inputs. How can the government help this situation?
First, we should commend the government for exempting agricultural practitioners and every other stakeholder in the agricultural sector from the lockdown. Agencies such as the National Agricultural Seeds Council, ARMTI and other establishments that service the agricultural sector are up and running and available for farmers and other stakeholders to access for the essential services that they provide. In addition, the government and private operators have set up fertiliser blending plants in the country to ease access to very important farm inputs.
Moreover, ARMTI is advocating wider adoption of organic agriculture, the inputs for which are cheap and can be easily sourced around us. The practice improves the soil structure, and produces healthy food for human consumption.
As the Federal Government rolls out COVID-19 protocols, including social distancing and lockdown policies, what steps can they take to ensure the food production sector would not be hampered?
Naturally, agricultural activities obey social distancing principles. In addition, the government has categorised agricultural activities as essential service. These should be allowed to go on despite the current lockdown, but with strict adherence to the safety principles of hand washing, social distancing and use of personal protective wears such as face masks and gloves.
The only aspect that requires help at this time is marketing. Farmers and stakeholders in agricultural commodity value chain need to request for help on storage from government agencies such as National Stored Products Research Institute (NSPRI). Moreover, now is the time for agricultural practitioners to explore the innovation that social media provides for the marketing of their produce. Thankfully, transportation of food products has also been exempted from the lockdown.
Would you say that famine and gross inflation /recession await Nigeria, post-COVID-19 or not?
Not necessarily; the pro-active strategies and interventions that the government is taking will help to minimise the impact and salvage the situation.
What general advice would you give Nigerians and homes to enhance food security next year?
First, citizens should obey the government’s protocol on COVID-19 and take responsibility in containing the virus. We should also encourage actors in the nation’s agricultural commodity value chain by consuming locally produced agricultural products. And, everyone should play a part in increasing food production in the country; cultivate a farm and a garden no matter how small.
Agricultural activities must not stop. Pandemic or not, feeding goes on and agriculture is that sector that if fully exploited, has the capacity to feed the nation and become the mainstay of its economy.