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.
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.
The CBN Governor. Mr.
Godwin Emefiele, who read out the communique shortly after the meeting, said
the development would necessitate huge sacrifices from Nigerians.
Crude oil prices had
declined from a peak of $114 barrel in July 2014 to $30.25 per barrel on Tuesday.
The CBN governor said
since oil prices had been on a steady decline, certain trade-offs would have to
be envisaged and accommodated.
He said, “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.”
As a result of the drop
in oil revenues, the governor said the need for consistently sound and
coordinated macro economy policies had become inevitable.
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