Thursday, April 23,
2020 / 10:07 AM / By United Capital / Header Image Credit: Money Control
The past few weeks have
been very challenging for global economies, especially for the crude oil -
exporting countries, amid COVID-19 outbreak and crude oil price crash. The
latter challenge brings back the unsavoury memories of the 2016 recession,
which was induced by the slump in global crude oil price and domestic
production. Though the economic recovery in 2017 was spurred by the improvement
in global crude oil prices and domestic production, the recession birthed the
launch of the Economic Recovery Growth Plan (ERGP) and the Investors & Exporters
Window (I&E).
Commendably, the
government appears to be taking advantage of the reform opportunities in the
2020 crisis, as it quickly adjusted its budgeted estimates for the year to
reflect the new realities, removed petroleum subsidy, allowed the partial
adjustment of the naira, and seek funding from the IMF.
However, like the 2016
crisis, Nigeria risks leaving money on the table amid the current absence of
any concrete policy guideline/plan on how to diversify the country's revenue
and unlock new growth sectors, post-COVID-19. Clearly, the fact that the
Nigerian government had to revise her projection for revenue from crude oil in
2020 (which normally contribute above 50.0% of FG's revenue) downwards from c.
N2.6tn to N254.2bn shows that the nation cannot continue to rely on crude oil
revenue, especially amid the expectation for volatilities in the crude market
to remain into the foreseeable future.
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