According to media reports, the Monetary Policy Committee of the Central Bank of Nigeria on Tuesday warned Nigerians to brace for a longer period of low revenue from oil sources, which would necessitate hard and uncomfortable choices.
Apex bank warns Nigerians of hard times ahead, says oil slump to continue
Crude oil prices, from a peak of $114 barrel in July 2014, had declined to $30.25 per barrel on Tuesday.
Punch.ng reports that the committee, in a communique issued at the end of its first meeting for the 2016 fiscal period in Abuja, observed that while the period of low oil prices, which occurred in 2005, lasted for a maximum of eight months, the current situation was expected to continue over a longer period of time.
Mr. Godwin Emefiele, CBN Governor, who read out the communique shortly after the meeting, said this would necessitate huge sacrifices from Nigerians.
“The committee observed that the last episode of low oil prices in 2005 lasted for a maximum period of eight months. However, the current episode of lower oil prices is projected to remain over a very long period. Consequently, it is imperative to brace for a longer period of low government revenues from oil sources, which would necessitate hard and uncomfortable choices as the economy transits to more sustainable sources of revenue, consistent with the economic realities and strategic objectives of the country. In the circumstance, certain trade-offs must be envisaged and duly accommodated,” Emefiele said, according to the Punch report.
The governor said the need for consistently sound and coordinated macro economy policies utterly necessary and unavoidable, as a result of the drop in oil revenues.
Based on this, Emefiele said the central bank was currently refining the framework for foreign exchange management in order to ensure a more effective and liquid forex market, both now and after the crisis.
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