Pandemic Impact on the Nigerian Economy: The Significance of Maritime Resources Amidst Plummeting Oil Prices

It is trite that the global pandemic crisis has marked a deteriorating effect on the world economy. This epidemiological threat inflicts a disruption on the free flow of international trade, making it difficult to demand and supply goods locally and internationally, and creating problems of rendering labour services in affected areas. Amidst this, decreasing oil prices, fall in stock markets, and so on, continue to plummet. This article seeks to buttress the importance of maritime resources to economic growth, deliberate on the marine and petroleum dichotomy and provide recommendations for the use of blue economy for development.

The world is faced with its biggest health emergency issue and there are fears that this might lead to a global economic recession. In the United States of America, a travel ban on 26 European countries came into effect and the unprecedented move sent stocks crashing to their worst losses in over 30 years. The Black Monday witnessed the plunge in oil prices to $30 per barrel, an all-time low since 1987. All these, and more, project the fallout of the economy. These statistics are alarming, especially for oil dependent countries. For instance, Nigeria produces about 2.5 million barrels per day and generates a majority of her revenue from these products. Therefore, the current realities create an impending doom for her economic sector, and the need for diversification cannot be overstated at this present time.

Nigeria’s rich mineral deposits, internal water network, shipping and coastline depicts that she boasts of a huge Maritime sector. Unfortunately, these maritime resources are hardly harnessed. For Nigeria to maximize her vast coastline, there is a need to facilitate trade between and among her landlocked neighbours. Nigeria should focus on creating a more enabling infrastructure including digital logistics, inland waterways expansion, foreign direct investment and encouraging more private investors to enter the maritime business, as this will bring incentives for expansion. This will be beneficial to Nigeria and help boost the economic situation of major landlocked countries in West Africa such as Mali, Niger, Burkina Faso and Chad. Amidst the current epidemic realities, Nigeria needs to focus on exportation over importation, as the hike in the dollar rate makes it difficult to patronize foreign goods.

Furthermore, the importance of Maritime to oil production cannot be undermined. The vast oceans and seas are used for oil exploration, as seen in offshore oil productions, and the transportation of these products are done through adequate shipping networks. However, petroleum production is not the only item on the Maritime agenda, and the belief that states must choose between it and other uses of the sea is a false dichotomy. A moderate plan for maritime governance would focus on an objective inventory of resources available and tools required for optimum exploitation and sustainable development. Thus, maritime and petroleum resources go together, but there is a need to look beyond that at this point in time.

In addition, it is recommended that the blue economy concepts come to the rescue of Nigeria’s sinking economy. First off, the maintenance of the seaports should be the top priority, and the seaports should be majorly for exports. There is a need to set an adequate port infrastructure quality and logistics performance that will enhance seaborne trades, as this will have a significant impact on the economy. Also, an adoption of the E-Customs method is recommended. The manner and method of operations of the Nigerian Custom services will improve, with imports and exports becoming paperless and easier. Attention should also be given to maritime security and safety; Nigeria loses a huge amount of revenue to oil bunkering. It was reported that the oil productions from oil bunkering is the seventh largest production in Africa, resulting in a loss of about $6 billion per annum.

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Conclusively, in spite of all its promises, the potential to develop a strong Maritime sector is limited by a series of challenges. Importantly, there is the need to overcome current economic trends that are rapidly degrading the sector through the unsustainable extraction of marine resources, physical alterations of the ports, to mention but a few. Regardless, harnessing the maritime resources and making use of the maritime mechanisms seem to be a viable option to surviving the current realities of the plunging oil prices which is taking its toll on the Nigerian economy.

Olu-Ashake Boluwatife Victor is a final year law student of the University of Lagos, and the president of the Maritime Forum. He has keen interest in Maritime, commercial, Energy and Environmental law, with aspirations to grow in these fields. He has evolved through various trainings, Internships, volunteering services and attended numerous conferences.