The Nigerian government has vowed to protect the economy from any external shock that might arise from the global drop in oil prices, and warned that it would not allow “merchants of fear” to distort facts about the economy in order to sow any seed of hopelessness.
This was stated recently by Ngozi Okonjo-Iweala, minister of finance. Speaking during the National Insurance Summit which was held in Abuja recently with the theme, “Transforming the Nigerian Insurance Sector-A Three-Year Agenda,” Okonjo-Iweala, in her keynote address admitted that while the economy is currently experiencing challenges, a lot of monetary and fiscal measures had been introduced to put it back on track.
“Unleashing the latent energies of the insurance industry to create more jobs and boost economic development is one of our strategic responses to close the gap created by the economic challenges we are confronting at the moment.
“Given the great progress which the banking and pension sectors have made in the last decade, insurance can do as well or even better. Many of us, private companies and households are concerned about how the current economic challenges will affect them.
“That is natural and legitimate. But we should avoid the kind of fear that will paralyse us or make us do the wrong things. Government is open to constructive criticism and ideas because we need to work together as a country to tackle these present challenges. But we should not let the merchants of fear, those who want to politicise and make political capital by distorting facts about the economy to succeed,” She said.
Okonjo-Iweala said these challenges had provided the country with an opportunity to unleash the potential of other sectors of the economy.
“We have challenges but we also have strengths – a diversifying economy, increasing non-oil revenues from tax, a growing private sector and a mix of the right policies to help the economy grow sustainably,” she added.
Meanwhile the federal government and the oil and gas producing companies may have lost an estimated $11.5 billion due to the drop in the price of Brent crude oil from $115 per barrel in June to $68.62 in November.
With Nigeria producing about 2.4 million barrels per day (bpd) and exporting 2.2 million bpd, the country may have lost as much as $11.5 billion between June and November this year, forcing the federal government to introduce a raft of measures to shore up its revenue in the face of dwindling earnings from crude oil, its main revenue source. The situation may even become more dire should the slide persist.
Worried that the price would tumble below $80 per barrel, the federal government revised the 2015 budget benchmark to $65 which is below the $77.50 used in 2014.
Meanwhile, high subsidy payments, devaluation of the naira and low capacity utilization of the country’s refineries have been identified as factors denying Nigerians a reduction in the pump price of petrol amid falling global oil prices.