Slump in Oil Prices: Tinubu and his Utopian Way Out
The former governor of Lagos State and Chieftain of the bourgeois opposition party All Progressives Congress (APC) Bola Ahmed Tinubu wrote an article which appeared in many national dailies with the tittle : " Slump in Oil Prices: A Progressive Way Out". The two main lines of arguement of the article were criticism of fiscal austerity and monetary tightening and a prescription of fiscal and monetary expansion, which in Nigeria means decoupling fiscal spending from dollar receipts.
Before going into critique of Tinubu's letter, it is important to give some background against which the bourgeois politician wrote. Nigeria, as a monocommodity economy, depends on oil exports for 90% of her foreign exchange earnings and 80% of government revenues. Over the last four months, crude oil has lost more than 30% of its price; from the June peak of $115 per barrel to less than $78 per barrel, below the benchmark price for Nigeria's 2015 budget. Nigeria's excess crude account balance fell by twice as much, losing more than 60% of its value; from $4.1 billion to $1.4 billion at the moment. Naira lost more than 7% of its value so far this year. The fate of Nigeria's economy will not be decided internally; events on global level are the decisive factors.