President Buhari marks a week-long trip to the Middle East with a focus on discussions with Saudi and UAE leaders on the sharp and drastic decline in the price of crude oil and what OPEC should do about it.
Although, international talks about what course to take with oil as a dwindling economic resource are sound, Buhari must look within the country and to federal government funding to help Nigeria.
In 1932 the Saudi family presided over a nation that moved from a fully nomadic and primitive society to a major and powerful player in global economics and politics. Despite all the internal and international turmoil, Saudi Arabia has retained its power.
The person most recently responsible for this maintenance of power is the deceased king, Abdullah bin Abdulaziz Al Saud (January 2015). And although the recently appointed King Salman has moved away from some of King Abdullah’s conservative spending practices (in February 2015 estimates that the king’s post-coronation giveaway cost more than $32 billion, more than the entire annual budget for Nigeria), Saudi Arabia is still a collective force.
The Middle Eastern giant, like Nigeria, has several demographic challenges. One of these is the kingdoms projected growth rate, by the year 2030 the KSA’s population is expected to increase by an estimated 10 million. Comparatively, Nigeria’s population is set to increase by an estimated 84 million. Half the population of KSA is under the age of 25, with Nigeria having similar age demographics. The youth unemployment rate in Saudi Arabia is about 30% while Nigeria’s stands at about 50%.
To ensure security and social order in the face of these numbers the Saudi government provides heavy subsidies with oil export revenue funding the vast majority of these subsidies, while simultaneously trying to stimulate growth in the private sector to boost employment rates.
The government recently invested more than 21 billion dollars in the education sector to prepare Saudi citizens to be more viable candidates for hire and to equip the Saudi population with the skills necessary to be productive in the private sector. Not only is there a focus on the private sector but an enormous amount is being spent on research, science and creating factories that will use renewable energy sources.
Additionally, oil refineries are being invested that will specifically house new technologies for more efficient and quality refinement to sell oil at a higher market value.
If Nigeria is allowed to develop economically as Saudi Arabia has in its short history, it would be beneficial to loosen ties to the west, as Saudi Arabia did in the late 1990s and early 2000s. Buhari should continue to look east to China, India, Russia and other Middle Eastern nations for economic collaboration.
The predominate thing to look to the west for is boots on the ground, intelligence, and special forces operations to crush the insurgency, that is not greatly understood by the Nigerian government and the predominately, more economically stable, southern region of the country.
If the price of oil remains at around $30.00 a barrel Nigeria will face existential problems, as will the rest of the West African region.
On a cultural level the Saudis have maintained their traditional culture while equally thrusting themselves into modernity.
It may take a generation to change the current system in Nigeria. Nevertheless, Nigeria is a vibrant society, it has its problems, like all societies in the world but it is not a failed society, it is experiencing growing pains, but it is a society that will certainly endure.
Is Buhari the right man to take on the challenge?