It is estimated that Nigeria loses approximately 300,000 barrels of crude oil per day due to oil theft.
“Nigeria is massively indebted, as the country is currently servicing its existing debt.
“We would be better able to balance our books, pay for social services, and promote national development if there were no oil theft.
“Additionally, the ASUU issue would have been resolved if there had not been oil theft, as they are requesting payment of $1.3 trillion in arrears owed to them as a result of agreements they had with the federal government. These issues will be solved if oil theft stops for two months.
These were the submissions made by Professor Kingsley Moghalu, a former deputy governor of Nigeria’s Central Bank and political economist on Friday while discussing oil theft on ThisMorning with Yoriu Folarin.
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Prof. Moghalu went on to say that oil theft is a major issue in Nigeria. “It is organise crime, which says a lot about the ‘state’ of the Nigerian state.
“A full one-third of the natural resources on which it relies for foreign exchange are stolen, with 90% of them being stolen.”
According to the former CBN governor, in order for Nigeria to survive in the short term, the federal government must address the issue of oil theft, as the country continues to sink deeper and deeper into a severe economic crisis.
He went on to say that there are numerous revenue streams, including stolen revenue from oil theft.
Nigerians are not secure due to security issues, lack of political will, and other factors.
Prof. Moghalu pointed out that it is not surprising that the government is currently attempting to become more aggressive against terrorists by going up against the enemy for a number of reasons.
‘You can’t fight terrorism by fighting a defensive war”
“I suspect that there might have been a lot of reactions of panic in the political class itself, people began to move motions of impeaching the president.
“The diplomatic community as well, everyone was worried for their safety and people began to realise that we cannot continue to take excuses anymore, we therefore began to see a stronger pushback.
“We hope that the pushback is sustained and increased because terrorists must be eradicated; we cannot live with terrorism, and we hope that the same thing will be applied to the oil theft crisis.
“I believe that if government is serious about stopping oil theft, it will be stopped.
Speaking on the value of the naira, former deputy CBN governor Prof Moghalu said it is a combination of Nigeria relying primarily on oil to earn foreign exchange on crude oil.
When you have a mono product economy in terms of foreign exchange earnings, the risk to which your economy is exposed is high because oil sales are where our foreign reserves are funded, if anything goes wrong with the price of oil, it will affect the value of our legal tender, the naira.
According to him, the primary purpose of foreign reserves is to protect the value of our currency because they demonstrate that we have enough money to cover imports for several months. This boosts confidence in international trade when reserves start to decline, which occurs when oil prices fall, production of oil is very low, or when oil prices are high but we are currently spending almost all of our income from oil on petroleum products.
“Any of these circumstances creates a massive structural imbalance in the foreign reserves”, he added.
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