Nairametrics| Former militant leaders in the Niger Delta oil region have, yesterday, threatened to stage protests over the delayed payments of their stipends (N65,000 per month) as allowed for by a 2009 amnesty program. According to them, these stipends must be paid “to avert any situation that will warrant beneficiaries of the programme going to the streets to protest and barricade roads,”
If history is anything to go by, then we can expect that the retribution for non-payment of these allowances will go more than street protests and road barricades. Last year, when the Buhari administration had in the name of reducing corruption, slashed the budget for cash payments to militants, the result was a surge in pipeline explosions and a crippling of oil production.
There could hardly be a worse time for this to happen as the country seems to be scratching its way out of the economic rubble it presently finds itself. And like it or not, the oil production in the Niger Delta region remains key to any improvement in the economy.
Take, for example, the success being experienced in the handling of the forex issue. The only reason why the Central Bank of Nigeria (CBN) is able to inject billions of dollars into the forex market is because the foreign reserves of the country steadily rose. Over 70% of these reserves are funds from crude oil sales. Any cut in oil production will lead to lower reserves, which in turn will resurrect forex scarcity and further damage the economy.
Another vital aspect is the 2017 budget. The 2017 budget and in fact the Medium Term Expenditure Plan of the FG which is expected to last between 2017 and 2019, is supposed to be the road to recovery from the economic recession Nigeria presently finds itself. Capital expenditure, meant to drive the economic growth of the country as well as social investment programs to provide immediate relief to the most vulnerable are bedrocks of this plan.
However, the budget was based on oil production of 2.2 million bpd. Already, this target is not being met. Any further deficit will mean that the FG will have to borrow more or spend from its reserves. Given the already huge sums the FG has borrowed, that will not be an option. Neither will the reserves as they would have been depleted as explained earlier. Then, what way out will there be?
Thus, it is imperative that something is done quickly about the situation so that, at this critical junction, FG does not reverse all the forward steps it has achieved.