The President, Major General Muhammadu Buhari (retd.), has said that the sudden crash in crude oil price by 45 per cent heightens the need for Nigeria to promote growth in other sectors of its economy.
Buhari stated that the development, occasioned by the outbreak of coronavirus, would seriously affect the ability of the Federal Government to deliver planned infrastructure, especially with the impact on oil revenue.
The President spoke on Wednesday night at the Presidential Villa during a dinner he hosted for participants of the “Going for Growth 2.0 Roundtable.”
The round-table session, which was held earlier same day, was organised by the Central Bank of Nigeria in collaboration with the private sector to discuss challenges of the Nigerian economy and proffer solutions.
Buhari said, “The onset of the coronavirus in December 2019, which has spread to over 100 countries, is having a significant impact on global growth, as well as commodity prices such as crude oil, which has dropped by over 45 per cent since January 2020.
“These external challenges have only served to reinforce the importance of ensuring that Nigeria is self-sufficient in the production of strategic goods.
“They have also highlighted the fact that we need to continue to implement measures that would enable growth in other sectors of our economy and reduce our dependence on earnings from crude oil.
“For these objectives to be achieved, the vital role of the Nigerian private sector cannot be disputed or overemphasised.”
The President stated that his administration had long taken the diversification of the economy as a policy it must implement as a long-term solution to crude oil market volatility.
He called on the private sector to play a supportive role in achieving the self-sufficiency objective, while the government too would do everything within its means to promote the private sector.
The CBN’s Governor, Mr Godwin Emefiele, told the session that the roundtable was a follow-up to the first one held in Lagos in June, which led to the bank increasing credit to the real sector by N1.9tn.
Emefiele explained that the second session was timely, coming amid the coronavirus pandemic and the crude oil price crash.
He said, “The coronavirus has affected global supply chains in key markets and has resulted in significant reductions in the demand for goods and services by consumers.
“More importantly, the impact of the coronavirus has led to a 45 per cent decrease in the price of crude oil since the beginning of the year. It is expected that global growth would also drop in 2020.
“Given our dependence on crude oil for close to 80 per cent of our export earnings and 50 per cent of government expenditures, the drop affects the government’s ability to meet its capital and infrastructure funding objectives.”
The CBN governor informed Buhari that in the days ahead, the recommendations of the round-table session would be forwarded to his office.
Meanwhile, at a separate event, Vice-President Yemi Osinbajo praised Nigeria for moving up on the World Bank’s Ease of Doing Business rankings.
“What is more important than moving up in the rankings is the need to ensure that all our efforts translate into long-term sustainable growth for the economy,” Osinbajo said.
He spoke at the third edition of the Presidential Enabling Business Environment Council awards held at the State House Banquet Hall, Abuja.
The VP urged stakeholders to make the Nigerian business environment very competitive to remain atop on the African continent.