Contrary to the confidence expressed by the Minister of Finance, Mrs. Kemi Adeosun, that the Federal Government would not be bothered by fluctuations in the price of crude at the international market, financial analysts have warned Nigerians not to be deceived.
The financial experts described the minister’s comment as a mere comment of hope not based on fact.
The Head, Energy Strategy, Ecobank Plc, Mr. Dolapo Oni, described the statement of the minister as one of hope and not confidence, as he insisted that the Nigerian economy had not grown to the level the government would not be bothered about the movement of the price of crude at the international market.
He said, “I disagree with the finance minister and we must care about the price of crude because we can’t afford to be comfortable with little achievement. The economy has not fully recovered and we must remember that the northward movement of the major indicators of the stock market, which is one of the barometers of the economy, is traceable to the increased prices of the crude in the international market.
“We should not change crude oil benchmark every year. It should be left low because it is meant to help us not rely on oil as the only revenue but also focus on core diversification of the economy. It won’t be easy to ignore developments in the international market because the economy is just out of recession and we need money to ease the pressure on the economy.”
Another economist and analyst, Mrs. Felicia Chiogor, also urged the government to prepare for unforeseen circumstances, as the markets were unpredictable.
She said, “Nobody can actually predict what 2018 holds and what interplay of geopolitical forces will impact on the global energy market.
However, that’s the essence of the Sovereign Wealth Fund where there is a portion of the excess price that could be used for budgetary support.
“Moreover, fiscal and monetary policies can be used to mitigate the impact of any shortfall in the price of oil below the benchmark, if that were to occur on the economy, especially if it’s perceived to be temporary.’’
Meanwhile, Adeosun had said the Federal Government would not be bothered by fluctuations in the price of crude at the international market as it had learned to live with a low crude oil price.
Oil, which had sold as low as $25 per barrel crossed $70 per barrel last week on a bullish streak.
She had said, “We have got to a point where we don’t care whether oil prices will be sustained at the level that they have recently risen to. We have been able to balance our budget at $45-$46 per barrel and we’ve got to learn to live comfortably at that level.
“It’s at $66-$67 per barrel today, but we’ve been here before, right? And we can’t afford to be exposed to that, so I really try very hard to ignore the oil price.”
