When Countries Fail to Plan
Nigeria’s immediate reaction to global oil shocks highlights a critical lack of strategic reserves. Without a buffer to cushion supply or price shifts, the country remains vulnerable to failure
When Countries Fail to Plan
Many people wonder why any adverse development in the global economy quickly impacts Nigeria. A recent example is the tension involving Iran, which led to an increase in global oil prices and, subsequently, a rise in petroleum prices in Nigeria.
A few weeks ago, petrol was selling for less than ₦1,000 per litre, but today it costs over ₦1,200 per litre. Diesel, which was also priced below ₦1,000 per litre, is now over ₦1,500 per litre. These rapid increases illustrate how quickly external shocks can affect the Nigerian economy.
The reason for this is straightforward: most countries, whether they are oil-producing or non-oil-producing, maintain strategic petroleum reserves to cushion against supply or price shocks. This means that when there is a disruption in the global oil market, they can release part of these reserves to stabilize supply. However, Nigeria lacks such a buffer, so the impact is felt almost immediately.
The underlying issue is a lack of planning. Countries that engage in planning create buffers against shocks, while those that do not remain vulnerable to them. The old maxim remains true: when a country fails to plan, it has already planned to fail.
A New Nigeria is POssible. -PO