For context, implementing the approved 2022 budget will cost $26 billion. In an ideal, oil-based economy, these figures would suggest that Nigeria’s oil revenues could cover the country’s needs. But Nigeria is not an ideal country and unfortunately, we no longer have an oil-based economy.
There was a time when Nigeria was undoubtedly an oil economy. In the 1970s, there was a global boom in oil prices, and oil-producing countries benefited from the sharp spike in the price of crude oil. A new cash cow had emerged.
In November 1973, crude oil was $23 a barrel, but the price surged to $60 a barrel two months later. The cost of crude oil remained above $23 for the next two decades. Most of the time, the price was above $40 and went over $130 during a short period. These prices translated to a lot of cash flowing into the Nigerian economy and the government.