Dwindling Revenue: No Cause For Alarm – Okonjo-Iweala

As the impact of oil price slide in the international market bites harder, the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala has called on Nigerians not to panic, reassuring that the nation’s financial team has put in place strategies to manage oil prices as low as $60 per barrel.

Saying the recent drop in oil price did not come as a surprise and as such there is no need for the nation to panic, she pointed out that what was needed was a systematic and focused approach to overcome the development.

“This is what we have. Our fiscal measures comprise both revenue and expenditure effort.
Our scenario-based approach to managing the impact of the oil price drop is proactive and comprehensive. Even if the price drops to 60 dollars we are ready.

“Panic is not a strategy. We are managing the situation to keep the economy on a stable sustainable course and we will not listen to those who want us to throw up our hands in despair and give up.
“As a central part of our strategy, we have revised our oil price expectations over the short to medium term! We have lowered our benchmark oil price assumption to $73 per barrel after some careful analysis of the possible future direction of oil price as well as the soft floor price for shale oil, which is estimated at about $75 per barrel.

“But let me clearly state that we are not taking a point-estimate position as regards the future price of oil. We fully recognize that oil prices may fall lower or even rebound. Prices could fall to $70 a barrel, $65 or even $60.

“Prices could also rebound to $75 – $85 a barrel. What we did was to work within a range of $60 – $85 thought possible by analysts, put a package of measures around an estimate at the midpoint of that range, that is, $73, and then build additional measures for scenarios at $70, $65 and $60 a barrel. The best way to manage uncertainty is to take a scenario-based approach to be ready for alternatives that may occur. This is what we have done,” she said.

loading...