Following Nigeria’s refusal to devalue its currency (the naira), in-line with IMF recommendations, crude oil traders worldwide have begun to shun Nigerian crude oil over the last several months.
Nigeria remains one of the primary sources of “sweet crude” oil grades that is relatively pure crude oil with low levels of sulfuric content. In order to refine heavy oil grades with higher levels of sulfur and other impurities, refineries throughout the world mix sweet crude with other grades of oil to produce its various classes of refined products.
The development has caused Nigeria’s already dwindling revenues to decline even further dangerously flirting with insolvency.
Unbeknown to Nigerian officials, behind the inexplicable drop in sales is a top secret operation orchestrated by high-ranking officials within the US government itself. The IMF and the US Government are different heads of the same creature. The repeated and firm recommendations of the IMF for Nigeria to devalue its currency and weaken its economy is also the firm position of the United States. Because the CBN and Nigerian officials have vehemently refused, they have responded by organizing a clandestine global boycott of Nigerian oil to starve the nation of foreign exchange earnings and force a currency devaluation.
The government has managed to save and increase foreign reserves despite low oil prices, through prudent management of the CBN has shown that it can limp along and ride out the slum in oil prices.
Many Nigerian policy-makers in the executive and legislature fail to realize the truth that the United States under the current administration is not a friend of Nigeria. In the height of war they refused to sell weapons and liaised with South African intelligence to circumvent weapons procurement through other means.
Further even after the election of President Buhari, has continued their hostile policy to undermine Nigerian security and instead strengthen Nigeria’s immediate neighbours. Economically, the US through the IMF has recommended damaging policies of currency devaluation, and is now actively organizing a global boycott of Nigerian crude oil to further starve the CBN of foreign exchange. The question is, why has the United States adopted a overtly hostile stance toward Nigeria? The answer is very simple.
Nigerian policy makers are keen to the hostile rivalry between Nigeria and South Africa for influence and policy direction on the African continent. They can easily see that South Africa is an adversary. What they fail to realize is that in the rivalry between the two powerhouses of Africa, the United States has chosen sides, and South Africa is their favourite partner.
Undermining Nigerian security and economic growth diminishes the nation’s growing influence in Africa, and aids South Africa’s declining presence. South Africa is the only African country on the G20 and for decades has been the only African country that matters to the world and to Western policy makers. They have a longstanding healthy relationship with South Africa that has made it easy for them to operate on the continent and expand their influence.
The rise of Nigeria above South Africa is a terrifying development and one that the United States is willing to obstruct and undermine both economically, politically, and militarily. Instead of smiling and embracing the Judas kisses given by U.S. officials Nigerian policy makers need to adopt the same caution with the United States as they have already with South Africa because the two are working together to check and contain Nigeria’s rise in Africa.
David O. Kuranga, Ph.D. is the managing director and principal of Kuranga and Associates, a full service investment, political and economic risk consultancy, and asset management firm that specializes in Africa. he is also the author of the book, The Power of Interdependence.
The opinions expressed in this article are solely those of the author.