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2020 budget is unsustainable with $57 per barrel crude oil benchmark – CBN Governor

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THE Central Bank of Nigeria, CBN has called for a downward review of the projected $57 oil benchmark proposed by the Federal Government in the 2020 budget, describing the current rate as unattainable in the oil market.

Godwin Emefiele, CBN Governor disclosed this at the end of the Monetary Policy Committee, MPC, meeting held in Abuja stating the uncertainty in the oil market does not favour the $57 oil benchmark.

“On crude oil price, the lull in the market suggests that prices would remain relatively weak into the foreseeable future. The committee resolved that the Federal Government should reconsider its 2020 budget oil price benchmark of $57 per barrel, to build fiscal buffers,” he said.

Nigeria’s Brent crude currently sells at $62.87 per barrel on Wednesday posted a positive high in two-months as the Organisation of Petroleum Exporting Countries, OPEC, put more stringent export control system for Nigeria and Iraq in a bid to raise global oil prices.

Emefiele said the buffers would put the Gross Domestic Product, GDP, on a good standing resulting in viable manufacturing and agricultural sectors.

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“The Committee is confident that despite the weaknesses from the external sector efforts to ramp-up domestic production, through these buffers by both the monetary and fiscal authorities, would douse the adverse effects the domestic economy in the medium term, through the reduction of importation of food and other commodities,” he said.

Speaking on the withdrawal of foreign investors from the country, Emefiele called on the Federal Government to make life easy for investors to do business, arguing that investment-friendly policies would make Nigeria a destination of the first choice for investors.

Reacting to questions that foreign investors were leaving Nigeria with their investments, the CBN governor said: “Issues bothering on the ease of doing business making life easy for people who choose to come to Nigeria to invest their funds whether portfolio or direct investors, we should  make life easy for them so that they will find Nigeria an investment destination,” he said.

He also stressed the need for diversification to strengthen the productive base of the economy and reduce dependence on oil.

“Diversification has become necessary now that Nigeria has signed the African Continental Free Trade Agreement, AFCTA,” he said.

 

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