Nigeria’s
Finance Minister, Dr. Ngozi Okonjo-Iweala, has given an assurance that
the government has put strategies in place to deal with falling oil
prices for as low as $60 dollars per barrel.
The Minister
said the scenario-based approaches developed to cushion the unfavourable
effects of the falling prices are comprehensive and supported by
extensive consultations with global analysts such as the International
Monetary Fund.
She said short to medium term strategies, mainly targeted at the poor and vulnerable, had been developed.
“People
should not get fixated on the $73 dollars. It is just the midpoint of
the range we have. If it falls to $70, we are ready with additional
measures. We have organised a set of measures around $73 dollars. We
have further measures at $65 and a third set of measures at $60,” she
said.
Dr Okonjo-Iweala said part of the medium term strategy was
a revenue target of three billion dollars over the next three years
with substantial cuts on expenditure both recurrent and capital.
She,
however, said the cuts would not affect priority sectors –
infrastructure, health, education and security – that would focus on the
poor and average Nigerians.
While presenting a master plan for
the Nigerian capital market towards global competitiveness, at an event
that brought together experts and key players in the financial economic
sector, held on Thursday in Abuja, the Minister tried to ease Nigerians
nerves, as the recent devaluation of the Naira had started showing
multiplier effect on cost of goods.
Key issues in the economy
came up for discussion and first among them was the falling oil prices
and the consequences on the economy.
The minister also assured
the participants that the medium term strategies to cushion the falling
oil prices would prioritise sectors that directly affect the poor and
vulnerable.
But for most of these strategies to work, a robust
capital market that will provide long term finance for developmental
projects is needed.
This is what the master plan developed by
the Securities and Exchange Commission, the body regulating the capital
market, is set to tackle.
The plans so far announced by the key
players in the financial economy are targeted at creating wealth and
opportunities for many Nigerians.
The Finance Minister
emphasised that although the global environment was uncertain, Nigeria
had the strategies to cushion the effects.
Crude oil sales is
Nigeria’s major source of revenue and the price of crude has in the last
few months hovered around $80 and the drop in price has forced the
government to adjust the crude oil price benchmark used in the proposed
2015 budget that has not been submitted to the National Assembly.
In
the midst of the drop in price, the Nigerian government announced
austerity measures aimed at cushioning the effect of the drop in crude
oil price.
The development coupled with the Central Bank of
Nigeria’s devaluation of the Naira had triggered fears over the economic
situation of the country and the days ahead.
Credit: Channels
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