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Looking Beyond Oil Price Collapse Towards Post Recovery Savings (Part 2)

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By Austin Okere

I will attempt to share the justification for this projection from the insights expressed by experts at various fora, and my own informed postulations.

Depending on which expert you talk to, and the perceived direction of the Chinese economy, you get three different views; a school of thought holds that the price of oil may be far from the top but closer to the bottom, while others believe that oil price will bottom out at about $20 per barrel. Yet another group holds that Oil price has reached equilibrium and will oscillate between $40 and $45 per barrel.

The optimists believe that oil price will recover to between $70 and $80 per barrel towards the end of the year, and remain within that band, as a sustainable balance between demand and supply is reached.

According to the 2015 OPEC annual statistics bulletin, world crude production in 2014 was 73.4 million barrels per day (mbpd) while demand was 91.3mbpd.

With the significant scale back in shale production arising from the steep price drop from late 2014 to levels that make shale production unviable, it will be safe to assume that production has dropped considerably while demand has more or less remained steady.

The major issue for me is the question of the so called glut. If there is indeed a glut, what is the accurate size of the glut and therefore, how long will it take for supply and demand to balance out.

I listened to an expert at a recent forum argue very eloquently against the widely touted 850 million barrel excess crude inventory.

Based on the data he and his firm have meticulously collected, he believes that the excess supply cannot be more than a quarter of the touted figure.

This means that the glut is overstated by 600 million barrels. Meanwhile, Iran’s return to the market has been less dramatic than the Iranians said it will be, adding only 220,000 barrels per day (bpd) in February 2016 according to the International Energy Agency (IEA); only a fifth of their forecast of 1mbpd.

The IEA also believes that non-OPEC output will fall by 750,000 bpd in 2016, while US production alone will decline by 530,000 bpd this year.

The other possible disrupter to oil is the incentive to explore alternative forms of energy such as renewables, majorly solar and wind, in response to the impending carbon tax fuelled by fears of global warming and pollution.

According to Amy Jaffe and Jeroen van der Veer, leading experts on global energy policy, factors such as technological advancements, the falling price of batteries that power electric vehicles, and a post-COP21 (UN Climate change conference in Paris in 2015) push for cleaner energy could drive oil use below 80 million barrels a day by 2040.

These threats to oil do not seem practical on a meaningful scale in the near to medium term.

The example in Germany seems to buttress the fact that renewables may not make sense in Europe and other cold climes, and that they can only be achieved with very steep and unsustainable subsidies.

It is reported that Germany, the poster boy for renewables has so far invested about $500b on wind and solar energy. And yet renewables account for only 3.5% of global energy use, while oil and gas accounts for as much as 60% (this excludes shale, peat and coal, which account for 10%).

Electricity accounts for 18%, while biofuels and waste account for the balance 12%. In simple terms, the eight major oil companies, with a cumulative valuation of $1.4trillion generate as much as 20 million barrels per day versus the $2trillion invested so far to generate the equivalent of 7million barrels of oil per day in renewable energy. How sustainable is this huge subsidy?

For the switch to electric cars to happen, we would need to replace refineries producing petrol with power plants that will produce the additional electricity required to charge the electric cars. How quickly can this switch happen, even if it were practical?

My theory on the oil narrative is as follows: Saudi Arabia being the biggest reserve holder wanted to drive the shale producers, whom they saw as ‘squatters’ out of the market.

They opened their taps to drive prices down, knowing that shale needed an oil price of above $40 to produce at break even.

The high oil prices were driving cheap capital into shale and improving technology and yielding high returns and thus attracting more capital and repeating the cycle, thereby iteratively making shale a bigger threat.

I believe that the Saudi plan was hijacked by the Oil traders, who thrive on price arbitrage fuelled by uncertainty.

They rode on the back of increased Saudi production to shout ‘oil glut’! They increased the FUD (fear uncertainty and doubt) with news of huge inventories coming on stream following the lifting of sanctions against Iran, but the general view is that Iran’s oil was already finding its way into the market through the back door, resulting in an insignificant net increase in supply.

It then became a self-fulfilling prophesy which snowballed, with the producers pumping recklessly to maintain market share and preserve earnings, which drove prices further down, exacerbating a bad situation.

I believe that the oil traders and bankers are trying to make up for a lost bet on the back of overenthusiastic exposure to the oil market. This is captured by the screaming headline in the Financial Times of March 22, 2016 ‘$150b losses on energy company bonds spur default fears’.

 The article further states that the total debt among oil and gas companies including loans almost tripled from $1.1trillion in 2006 to $3 trillion in 2014 quoting the Bank for International Settlements.

Twenty of Europe’s biggest banks have energy loans totalling $200b, enough to wipe out a quarter of their common equity, while twenty of the leading US banks have loans totalling $115b or 11% of their equity.

With the desperation arising from a risky bet gone awry, one does not need to dig too deep to glean a motivation to drive prices down, buy on the cheap and subsequently sell on the high to cover the huge debts.

I believe that in the end, the market will wave its magic wand, and supply and demand will correct themselves and reach equilibrium with price. You cannot hide a pregnancy for too long.

It is not at all surprising that the heads of the world’s largest oil trading houses, six of which sell enough oil to meet almost a fifth of global demand were unanimous in calling for an end to the two year price slump at a Financial Times conference in Lausanne.

What should be more important to all of us, beyond these theories is whether Nigeria will finally learn from her past mistakes and institute a mechanism for saving when oil prices rebound, as I believe they eventually will. And what if the optimists are wrong, and prices do not rise. We would have lost nothing.

We would have learnt to diversify away enough from oil to live comfortably within the current price. If on the other hand the optimists are right, then we will save the equivalent of $36.5b per year (i.e. 2.5mbpd X extra $40per barrel X 365 days).

In any case we would have nothing to lose by preparing and having to wait a while longer than anticipated. Success only happens when opportunity meets preparation.

 

Austin Okere is the Founder CWG Plc and Entrepreneur in Residence, Columbia Business School, New York. He also serves on the World Economic Forum Business Council on Innovation and Intrapreneurship.


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Tech Executives Double Down on AI, Talent and Adaptive Strategies to Lead in the Intelligence Age

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KPMG’s Global Tech Report 2026 reveals that organisations worldwide are moving beyond pilots and seeking to embed AI into core workflows and offerings, striving to scale investments. The new report identifies that while expectations are high and adoption is rapid; scaling can introduce additional complexity and returns vary widely.

  • 68 percent of organisations surveyed aim to reach the highest level of AI maturity by the end of 2026, yet only 24 percent are there today.
  • 88 percent are investing in building agentic AI into their systems.
  • 74 percent say their AI use cases are delivering business value, but only 24 percent achieve ROI across multiple use cases.
  • 90 percent plan to grow partnerships and tech ecosystems over the next year, yet 53 percent still lack the talent needed to bring their digital transformation plans to life.
  • 78 percent agree they must take more risks on emerging technologies to stay relevant.

The report asks: Can ambition match reality, and can organisations keep one eye on the next wave of innovation while delivering on today’s agenda?

“The future belongs to leaders who turn intelligence into advantage. Our research shows organisations are pushing past the early phase of ‘AI roulette’, placing scattered bets on multiple technologies, and are now increasingly focused on delivering value. When ambition meets disciplined execution, value compounds.

“Our 2026 Global Tech Report provides a synopsis of the critical things that high performers are doing better than most; a checklist for tech leaders looking to improve their organisational performance, emulate the high performers, and deliver higher ROI”. – Guy Holland, Global Leader, CIO Center of Excellence, KPMG International

”As Africa enters the Intelligence Age, the differentiator is no longer access to technology, but the ability to build the skills, governance, and operating models required to scale it responsibly. While organisations are accelerating AI adoption to drive productivity and growth, the real determinant of value lies in workforce readiness, executive alignment, and disciplined execution.

Those that invest early in digital skills, human-AI collaboration, and adaptive leadership will be best positioned to translate innovation into sustainable commercial and economic impact.” – Marshal Luusa, Partner: Technology & Innovation Lead, KPMG One Africa

 Key findings from the report

Tech maturity accelerates: Leaders set their sights on the top

Half (50 percent) of global tech leaders surveyed expect to reach the highest level of technology maturity in 2026, compared to only 11 percent today. This surge in optimism is fuelled by a move from isolated experiments to integrating AI and advanced technologies into core systems and scaling their impact.

High performers, those organisations leading in technology maturity, process maturity and value, are already reaping the rewards, reporting an average ROI of 4.5x, more than double the industry average of 2x. These leading organisations have progressed beyond pilot programs, prioritising the scaling of innovation and continually adapting to maintain a competitive edge in a fast-evolving environment.

Other organisations reporting higher ROI include smaller firms (3.6x), those with fewer cost pressures (2.6x), and transformation‑focused organisations (3.2x). The ROI pattern is equally nuanced: rather than a single investment ‘sweet spot’, clear ROI ‘zones’ emerge, from early quick wins to accelerating, enterprise‑wide value as maturity increases.

The age of agentic: AI adoption surges but innovation drives real business value

AI is now seen as a strategic necessity, not just industry hype. Sixty-eight percent of respondents are aiming for the highest level of AI maturity in their organisations. Eighty-eight percent of companies are already investing in agentic AI – autonomous digital agents transforming operations and decision-making. Seventy-four percent of respondents report that their AI initiatives are creating measurable business value, such as improved efficiency and reduced risk.

However, only 24 percent say they are scaling AI and achieving ROI across multiple use cases. This highlights the need for organisations to evolve KPIs beyond traditional financial and productivity metrics and build enterprise-wide alignment to fully realise AI’s potential.

The shift from AI experimentation to large-scale deployment is underway, with leaders working to embed AI into products, services, and value delivery.

Talent and agility power success: Human potential remains central

Human expertise remains central to digital transformation initiatives. Organisations are making significant investments in upskilling their workforce, building adaptive teams, and fostering cultures that embrace change.

Despite the rapid adoption of agentic AI, organisations still expect 42 percent of their tech workforce to remain permanent human staff by 2027 – only a five‑point drop from 2025.

High-performing companies plan to retain even more permanent human talent, with 50 percent remaining in place by 2027, revealing the continued importance of human expertise alongside AI. Despite these efforts, 53 percent of organisations report they still lack the talent needed to realise their digital transformation strategies.

Ninety-two percent of organisations surveyed anticipate that managing AI agents will become a critical skill within five years. The most successful organisations prioritise both technological advancements and people, empowering employees to innovate and adapt.

Strategic partnerships fuel growth: Ecosystems expand for the future

To overcome challenges and accelerate learning, 90 percent of organisations plan to grow partnerships and tech ecosystems over the next year. Strategic alliances are enabling access to specialised expertise, rapid innovation, and shared best practices.

As agentic AI and other advanced technologies become mainstream, organisations recognise the importance of building robust ecosystems that foster co-creation and continuous improvement. Nearly one-third of tech executives are planning to increase investment in centers of excellence, supporting cross-functional teams and controlled experimentation.

Preparing for tomorrow’s breakthroughs: Leaders embrace bold risks

The future is arriving fast, with quantum computing and Artificial Superintelligence (ASI) on the horizon. Leaders are already preparing for these breakthroughs, with 78 percent of organisations agreeing they must take more risks on emerging technologies to stay relevant.

The report urges organisations to maintain strategic foresight, invest in ethical frameworks, and build resilient, future-ready workforces. By balancing ambition with rational thinking and disciplined execution, tech executives are positioning their organisations to turn disruption into durable, compounding value.


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LIRS to Invoke NTAA to Recover Unpaid Taxes from Bank Accounts, Others

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Lagos Internal Revenue Service (LIRS) pursuant to Section 60 of the Nigeria Tax Administration Act (NTAA), plans to ask Nigerian banks to debit bank accounts of employers who failed to remit tax liability.

LIRS to Invoke NTAA to Recover Unpaid Taxes from Bank Accounts

This was disclosed in a recent notice on Sunday.

LIRS stressed that the move was in line with the implementation of the country’s NTAA and other new tax laws, which took effect on January 1, 2026.

“Where a taxpayer fails, neglects, or refuses to settle any established outstanding tax liability when due, LIRS may exercise its power under Section 60 to direct any of the following persons to pay the amount owed by the taxpayer:

“Banks and other financial institutions; Employers; tenants, debtors, or customers of the taxpayer; Agents, business partners, and any person holding money on behalf of the taxpayer; Any person owing money to the taxpayer, whether presently due or accruing. Once a substitution notice is issued, the person served is statutorily required to remit to LIRS the amount. Specified in the notice from funds belonging to, or payable to, the defaulting taxpayer,” the LIRS notice partly read.

Meanwhile, Taiwo Oyedele, chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, weeks ago ruled out claims that the government would debit personal accounts over tax remittances.


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Anambra Cuts Monday Pay to Kill Sit-at-Home

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Anambra State will implement pro-rata salary payments for civil servants starting February 2026, targeting chronic Monday absenteeism from the long-running sit-at-home order, Information Commissioner Dr. Law Mefor announced Saturday.

Anambra Cuts Monday Pay to Kill Sit-at-Home

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Speaking at an Awka briefing after the Executive Council’s end-of-tenure retreat, Mefor said improved security and transport have eliminated excuses for the four-year disruption, which cost the state trillions in lost revenue. “Workers enjoyed full pay despite staying away; now, no work means no pay for that day, calculated over 24 working days,” he stated.

Compliance measures include mandatory Monday clock-in forms, with markets urged to reopen fully amid bolstered security. This builds on a January 22 executive order docking 20% pay from teachers absent on Mondays.

Mefor warned that lost Mondays cripple revenue collection and productivity, rejecting alternatives like Saturday shifts as capitulation to agitators.


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