Sagging Nigeria oil revenues will soon be felt by consumers, politicians
Douala, Cameroon — Nigerians face a massive shortage of consumer goods as a result of slumping oil revenues, but criticism of the government's apmead-libparent misreading of the shifting oil market has been surprisingly muted - so far.
Nigeria's contentious, sometimes overly critical press has generally limited itself to castigating Nigerians for their profligacy and Western oil companies for their perfidy. Political damage to the administration of President Shehu Shagari has been minimal.
''The criticism has been surprisingly light,'' a government official said in Lagos last week.
He and others suggest the drain on Nigeria's foreign reserves to pay import bills - now running at almost $2 billion a month, some $600 million more than oil revenues - has convinced Nigerians it is time to stop importing some of the goods that city dwellers have come to view as necessities.
''I've been hearing it all day,'' said a visiting British businessman. ''They all say: 'This (crisis) is good for us.' ''
Whether that civic spirit will endure the seemingly inevitable shortages to come remains to be seen. Because, despite the ''temporary'' cutoff of letters of credit and import-registration forms, Lagos shops are remain well stocked because of the massive imports in recent months.
President Shagari told business leaders in Lagos March 31 that the ban would last only until mid-April. But he warned that foreign reserves would be marshaled for ''essential'' goods thereafter. To most observers here that means a return to at least some form of the hated import restrictions that were common under the former military government. In large measure they were lifted when Mr. Shagari took office in October 1980.
Although it is not clear what categories will be banned outright, both Nigerian and Western sources in Lagos expect luxury items like automobiles, electronic equipment, and a wide variety of imported food - Nigeria's largest foreign exchange drain - to be on the list. But the belt-tightening measures are likely to hit at an inopportune time for the Shagari administration. Campaigning for the 1983 election has already begun, and there are signs that the fragmented opposition may pose more of a threat to Shagari's National Party of Nigeria (NPN) than was expected several months ago.
At least parts of all four other parties have agreed to a coalition effort, the Progressive Parties' Alliance (PPA), on the national level. And while there is skepticism that the undampened ambitions of the aging leaders of many of the opposition groups will prevent a concerted effort against the NPN, a Western diplomat just back from a national tour disagrees. ''It (the PPA) is catching on,'' he said, adding that the NPN is in for tough battles in several states where it now holds governorships.
Given those political dangers, some businessmen and Nigerian commentators say that if the Shagari government opts for less painful restrictions to minimize election damage, its measures may not be sufficient to stop the drain on the central bank.
''It's not like the central bank was going to collate all the information (requested from banks at the time of the letter of credit ban), and then say, ''All right, we're going to own motor cars,'' an American banker said. ''They are going to look at it. And a political decision is going to be made.''
These sources say a lack of resolve by President Shagari, particularly on potentially explosive issues like rice - Africa's most political of foods - may in fact exacerbate the country's financial situation. Lack of reserves has already prompted a slowdown in public works projects. Construction industry sources say payment for work already done is so slow that some companies are talking of laying off workers.
Despite the bans and the calls for austerity, there is also in Lagos an underlying belief that, like past gluts, the current slump in the world oil market will pass. President Shagari said as much in his March 31 reassurances to business leaders. At least some Western economists agree:
''I'm telling businessmen that there'll be a short-term downturn, then maybe in six months activity will pick up,'' said an economic officer at a Western embassy.
''I'd say its just a hiccup that'll be over in three or four months,'' said a British architect who has lived in Nigeria for more than a decade.
Oil company sources, however, disagree. ''They have a sense of deja vu,'' the general manager of one company said. ''They remember 1977-78 (another short-lived glut) and think this is the same thing. It's not,'' he said flatly.
A banker in Lagos agreed: ''The day of 2.2 million barrels a day at $40 a barrel isover.''
In fact, Nigeria has not produced more than 2 million barrels a day for more than a year. Industry sources said April 7 that Nigerian production averaged 943,000 barrels a day in February - down from 1.4 million barrels a day in January. Western oil company executives refuse to say the figure won't go lower.
Even at current levels, the economic readjustment will be painful - and will almost certainly involve a higher political price tag than it has so far.
''This is a country that runs on money,'' said a diplomat. ''You're taking away some of that money, so certainly there will be political consequences.''