Nigeria, in a vortex

Nigeria is seen as a nation perpetually on the brink. Standing on the edge might even be the country's natural state of being. Whether it's elections, winning at football, organising events, combating Ebola and polio, Nigeria always gives the impression it'll all go horribly wrong.

And then from the jaws of defeat, a bruised and bloodied victory is snatched. As the presidential election on February 14 approaches, observers are looking to see if Nigeria will have one of its perpetual turnarounds.

The elections couldn't have come at a worse time for the Nigerian economy. Once seen as one of the great examples in the Africa rising narrative, it's now hovering close to a financial crisis. Oil still makes up between 70 and 80 per cent of government revenue, and is still the overwhelming source of foreign exchange in the country.

As the budget is pegged to the price of oil, any fluctuations reduce the government's ability to commit to spending plans. And in the last year, the government has gone from basing budgets on $77.50 a barrel for its 2014 budget - when prices were above $100 to as low as $65 a barrel even though the actual price of oil is way below that.

Suddenly the pool of money available to the government had shrunk dramatically in a few months. Lower oil prices did provide the Nigerian government with an opportunity to remove the inefficient petrol subsidy.

When Goodluck Jonathan's administration tried to get rid of the oil subsidy by stealth in January 2012, it led to the Occupy Nigeria protests. For two weeks demonstrators brought the country to a standstill, creating a solidarity which hadn't been seen before or since.

Those protests were actually cut short by Boko Haram bombings, when protest leaders suggested the government shouldn't have to deal with mass protests and battle terrorism at the same time. Petrol which costs less than market rates is about all the Nigerian people feel they can squeeze from their government as a benefit.

In a rather bizarre twist, as crude oil prices reduced, the government threw away the opportunity to let the market dictate petrol prices as has been done in countries like India and Indonesia recently. With oil at around the $48 mark, the petroleum minister announced a reduction in the price of petrol, effectively reinstating the subsidy.

Ngozi Okonjo-Iweala, the finance minister, was a brave soul in 2012, defying protesters by insisting the corruption — laden fuel subsidy had to go. So for the same oil and finance ministers to keep the subsidy they’d argued against in such a manner strikes some as illogical.

Effects of falling oil reveunue on economy The Nigerian government says it wants ordinary people to have a bit more money in their pocket, especially as the naira has lost value following a devaluation by the Central Bank of Nigeria in November last year, alongside an increase in interest rates. But the falling price of oil means less money that the government can afford to fritter away.

Growth figures for 2015 have been revised downwards by the IMF (from 7.3 per cent to 4.8 per cent ) and the Nigerian government itself (from 6.35 per cent to 5.5 per cent). Prominent indigenous oil companies such as Seplat are now looking shaky. It all shows how important oil has been in lubricating the Nigerian economy, despite the 2014 rebasing showing that oil was only 14.4 per cent of the economy.

Though the growing strength of US shale oil has only recently been factored into the global economy, keen observers would've noticed as far back as 2012, that the oil bonanza wouldn't last forever. The United States, had already began to reduce its reliance on foreign oil. And some Nigerian tankers were adrift at sea with no buyer; they weren't heading to Texas as would've been the tradition.

Weak Naira The final wobbly leg of the table of the Nigerian economy is the falling value of the currency. Trade between Nigerian and the rest of the world is overwhelmingly in favour of imports into Nigeria. It's an unfortunate equation Nigerians are familiar with. Other emerging economies are facing similar currency pressures, but how equipped Nigeria is to deal with it is another matter.

The one ironic certainty among all these problems that Nigeria faces is that the long term outlook for the economy is constant growth. With a population at 170million, and a high birth rate, growth is inevitable. But the key question is whether the economy can grow at a fast enough rate to create the number of jobs and prosperity levels the economy needs.

Diversifying economy Solutions to these problems are well known, no idea here would be new. But they are worth repeating. The solution to the deficit created by falling oil prices is to rely less on oil. For the half century that Nigeria has had oil, it hasn't become a Norway or a Dubai, and forgive the scepticism, but crude isn't about to change the country now.

Diversifying from oil means increasing the tax base for government revenue. And taxing from a wider base in turn means being able to create the prosperity that is worth taxing. ( There will be more people demanding services for their taxes, forcing accountability from a Nigerian government that more or less does its own thing.

Oil revenues are easy, the oil companies deposit the money into government accounts and not enough people are employed by the industry to cause too many ructions.

The easiest way to empower the non-oil sector is to fix electricity. A powered up Nigerian economy would be an economy on performance-enhancing drugs for which there would be no sanction. Power means Nigerian companies will be able to manufacture for export, and within Nigeria itself general productivity can be increased.

I suspect many are wondering where corruption sits in all of this. Well, it just sits there almost immovable, but other countries have thrived despite corruption, and Nigeria should be no different. Whoever wins the election on Valentine's Day, be it happy go Goodluck Jonathan, or the austere General Muhamadu Buhari, the president will have to make sure that cheap oil does not derail the economy.

• Nkem Ifejika is a jurnalist of the BBC World Service. He will be co-hosting the BBC Africa Debate which can be heard on BBC World Service today, Friday, February 6, at 2000 (Nigeria local time) and also co-presents the BBC World Service breakfast programme, Newsday.