By Obas Esiedesa
The Nigerian economy is in dire straight and urgent measures are needed to save it from imminent collapse, this seem to be the message from top government officials in charge of the economy and leading private investors in the country.
The global outbreak of the Coronavirus that has sent the price oil crashing to around $30 per barrel has left Nigeria’s budget in danger with financial experts predicting another round of economic recession barely three years after the last one.
But more shocking was the disclosure that 50 cargoes of Nigeria’s products were floating on the high seas without landing destination.
Speaking at a consultative roundtable meeting “Going for Growth 2.0” organised by Central Bank of Nigeria (CBN) in Abuja on Wednesday, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed admitted that the dramatic fall in oil price took the country by surprise.
She however called for calm, as Federal Government seeks to maximize the opportunities created by the fall.
The Minister said that the development was a wakeup call, adding that Nigeria as a country must look beyond oil and the best time was now.
She said: “We should not panic, we shouldn’t allow speculation, there is need to put our hands together with all major stakeholders to wither this storm.
“We must take opportunities this impact of coronavirus has provided for us. We are working to strengthen micro economy and we are also making moves to provide fiscal incentives for Small and Medium Enterprises (SMEs) to grow.
“The President has formed a team to review the impact of this crash in oil price on the budget. We are also working seriously to raise revenue from non-oil sector and in spite the dwindling revenue, increased funding to critical sectors is important.
“The government is as well making effort to enhance the Ease of Doing Business and will soon inaugurate E-Customs project to help facilitate trade,’’ she explained.
Mrs. Ahmed disclosed that plans were ongoing by the Federal Government to set up a national saving committee to design a national saving policy.
Also speaking at the event, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari disclosed the 50 Nigerian crude oil cargoes have not found landing.
Also, he stated that for the first in Nigeria’s history 12 LNG cargoes are stranded on the seas without a buyer.
“Today, I can share with you that there are over 12 stranded LNG cargoes in the market globally. It has never happened before. LNG cargoes that are stranded with no hope of being purchased because there is abrupt collapse in demand associated with the outbreak of coronavirus”, he disclosed.
Kyari said many oil producing countries are dropping the prices of their crude due to very weak demand.
He revealed: “Iraq dropped its price by five dollars and Saudi Arabia by eight dollars in some locations. So, when your crude oil sells at 30 dollars and you’re dropping it by eight dollars, it means that in the market, you’re selling it at 22 dollars.
“This is a huge problem that can be accommodated in some production environment like in Saudi Arabia.
“Today, the best of our production system is 15 dollars to 17 dollars a barrel, there are many countries whose cost of production is 30 dollars and we’re one of them.
“So, when the price now goes to 22 dollars and we’re producing at 30 dollars, that means we’re out of business,” he explained.
On his part, the Chairman of Dangote Group, Alhaji Aliko Dangote, said government and other major stakeholders must be more proactive to ensure that diversifying the nation’s economy becomes a reality.
Dangote, Nigeria and Africa’s richest man urged the government to make the business environment easier, especially tackling power supply challenge.
He explained that diversification of the nation’s economy seemed illusive, adding that all hands must be on deck to ensure the diversification becomes a reality.
He pointed out that was unacceptable for a big country like Nigeria to continue to depend on importation.
“If you look at the economy of Asia, its mainly export and in our own case, we have the domestic market. We are a country of more than 200 million people. Our market is huge.
“Our import in 2019 was about 47 billion dollars. It is not sustainable, we cannot have 200 million people and we are still importing most of the things we consume.
“We need to be more serious this time around, we have been talking about diversification, it is becoming illusive, is it impossible to diversify? No, it is possible but we need to be focused,” he added.