The significant decline of Nigeria’s foreign exchange earnings as well as revenue accruable to the federation account have persisted due to declining crude oil prices at the international market, the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, has said.
He also attributed the decline to a cut in the country’s crude oil production quota in compliance with the Organization of Petroleum Exporting Countries (OPEC) resolution last April.
Also, the Minister of Finance, Budget and National Planning, Zainab Ahmed, has quoted the National Bureau of Statistics (NBS) as giving a projection that Nigeria’s economy is primed to relapse into the second recession n four years by contracting by about 4.2 per cent from the third quarter of this year.
With the economy already contracting by about 6.1 per cent in the second quarter, analysts have concluded that although the performance of the economy is expected to improve, another contraction in the third quarter would complete the three consecutive cycles required for an economy to go into recession.
Although crude oil prices are gradually firming up from about $19 per barrel in April 2020 to about $42 per barrel currently, the CBN governor said they are yet to return to the pre-pandemic average level of over $60 in January 2020.
Mr Emefiele, who spoke at the 13th Banking and Finance Annual Conference of the Chartered Institute of Bankers of Nigeria (CIBN) in Abuja on Tuesday, said the profound impact of COVID-19 on the Nigerian economy in the 1st and 2nd quarter created a dual challenge for policymakers.
“We had to address a public health challenge while trying to reverse a significant downturn in economic activities,” he said.
The theme of the conference was “Facilitating a Sustainable Future: The Role of Banking and Finance.”
Oil prices appreciate as OPEC predicts decline in 2020 demand
Oil prices appreciated Tuesday after the Organization of the Petroleum Exporting Countries (OPEC) said that world oil demand would fall by 9.46 million barrels per day (bpd) in 2020.