With the sudden and unexpected drop in crude oil prices to about $30 in the global market this Monday, Nigerians have been enjoined to brace up for “a life without oil” henceforth.
The Minister of Finance, Budget and National Planning, Mrs, Zainab Ahmed who made the assertion in Abuja on Wednesday, however urged that the situation should not cause panic and speculation on the economy.
Mrs Ahmed spoke at a Consultative Roundtable tagged “Going For Growth 2.0”, organized by the Central Bank of Nigeria CBN in Abuja during which eminent Nigerians including ministers and other stakeholders also made contributions.
Her words, “The sudden and unexpected drop in crude prices to just over $30, comes as a shock and great surprise. These strong headwinds would reinforce the wake-up call to a life without oil. But that should not spread panic and speculation in our economy.
“We need to put our hands together to weather the storm. We need to work together to take the opportunities provided by this very harsh reality. We are working as government to strengthen our macroeconomic fundamentals. today are far stronger and more robust than in 2014-2016.
“There is no doubt that the combination of crude oil price crash and corona virus will put severe strain on our budget revenue, forex and many sectors, we are drastically reviewing the budget as well as redoubling our effort to raise revenue and plug the leakages and intensify engagement and support of sub-national entities and the private sector in our economic recovery and growth programs.”
The minister named other measures adopted by the government against depending on oil to include, the Presidential Initiatives on the 10 Agri-value chains and “sustaining the momentum on infrastructure investments and major capital projects for which we are in the process of accessing external concessionary loans”.
According to her, other measures include, enhancing the Nigerian Customs Service to strengthen its Trade Facilitation function through automation of its function and putting up the National Single Trading Platform with a view to facilitating trade and improve Import and export.
“But we also need to mobilize local savings, even before the crash of the crude oil price the Ministry of FBNP has reached out to the private sector and formed a committee to fashion out a National Savings Policy.
“This will enable us infuse into the Capital Market various instruments to suite several investors need. This will include long term instruments that will be suitable for investor groups that have patient capital such as Pension Funds”, she added.
In his welcome address, CBN Governor, Mr Godwin Emefiele,
noted that the session was more relevant today than ever before, given the external headwinds which the Nigerian economy faces, such as the effects of the trade and technology wars, and more importantly the recent spread of the corona virus, which has emerged as a major threat to global growth in 2020.
He said, “the impact of the corona virus across over 100 countries, has affected global supply chains, as well as demand for goods and services. Commodity prices have also been affected, as crude oil prices have plummeted by over 45 percent since January 2020”.
He recalled that despite IMF
projections earlier in the year that global growth would rise to 3.3 percent in 2020, up from 2.9 percent in 2019, “with the onset of the virus, global growth is expected to decline in 2020, but the extent of the decline would depend on how the epidemic is contained over the next few months”.
The Governor said although Central Banks in key markets across the globe have responded by reducing policy rates in order to stimulate growth, and taken measures to contain the spread of the virus, the “CBN fortunately had already embarked on similar measures which has resulted in significant reduction in lending rates, as part of our efforts to boost growth”.
“Working with the fiscal authorities, we will not hesitate to deploy additional measures to strengthen our buffers and insulate the Nigerian economy from the global headwinds”, Emefiele assured.
The Governor noted that some of the recommendations at the first Roundtable session last year in Lagos have been implemented by the CBN, adding that “these have contributed to the successes we recorded in improving access to credit for Nigerians in 2019”.
“Following the success of the 1st session, the management of the Central Bank of Nigeria decided to convene a second session in Abuja, working in partnership with key stakeholders in the public sector. I therefore have no doubt in my mind that with the caliber of people from both the public and private sector gathered here today, we would make the desired progress in generating ideas and solutions that will enable greater growth and development of the Nigerian economy”, he stated.
Eminent personalities who attended and also spoke at the session included, Minuets of Transportation, Chibuike Amechi; Works and Housing, Babatunde Fashola; Industry, Trade and Investment, Niyi Adebayo and the Group Managing Director of NNPC, Mele Kyari.
Others are Business magnates, Aliko Dangote, Jim Ovia, Tony Elumelu, Segun Agbaje.
Source: Prompt News