Nigeria’s ministry of finance and the Central Bank on Monday stayed mute over while panic gripped investors and the public over the oil price crash.
The Central Bank’s spokesperson Isaac Okorafor told BusinessDay that there is “no official statement”.
Following the outbreak of coronavirus in China, Oil price (Brent Crude) has fallen to as low as $35 per barrel on Monday, from the peak of $68/barrel in January 2020, which is below the $57/ barrel budget benchmark of the Nigerian government.
The foreign exchange is at higher risk as some Nigerians are buying dollars in anticipation for a currency devaluation.
“These are tough times for Nigeria, once again caused by outside forces,” said Charles Robertson, global chief economist at Renaissance Capital.
He said the authorities have a difficult choice between cutting spending on much needed investment, or maintaining spending by allowing the naira to depreciate in the NAFEX market, and sooner or later the latter is likely. Investors will be worried about investing in Nigeria when the oil price is this low.
