Ahmed Says FG Won’t Adjust Budget Benchmark On Oil Price Rebound.
The Federal Government on Monday said it is not in a hurry to adjust its benchmark oil price for the 2020 budget, following the attack of Saudi Arabia’s oil facility which had resulted into a rebound in oil price,
The Minister of Finance, Mrs Zainab Ahmed said this on Monday while answering questions from journalists at a media briefing on the forthcoming Nigeria Economic Summit.
The Federal Government had last week said that the 2020 budget would be predicated on a lower oil production of 2.18 million barrels per day and lower benchmark oil price of $55 per barrel.
In the 2019 budget, the budget benchmark was based on 2.3 mbpd oil production and $60 per barrel benchmark.
The cut in oil price benchmark, according to the government, was done considering that there would be glut in the oil market which would result into a fall in oil prices.
But since the attacks on the Saudi Arabian oil facility on Sunday, oil price had risen from $56 per barrel to about $71 per barrel.
But Ahmed described the attacks on the Saudi Arabian oil facility as worrisome, adding that if a county with such sophisticated security system could suffer such attacks, then Nigeria might be vulnerable.
She said the Federal Government would continue to monitor the situation in the global oil market and would respond appropriately when the need arises.
She said, “We shouldn’t be rejoicing over the misfortune of others. If Saudi Arabia that has a sophisticated security system is affected in this manner, it means we are also vulnerable. So let us not be in a hurry to celebrate. And as the minister of state has said, we should also not be in a hurry to adjust the revenues.”
Also reacting to the development, the Minister of State for Budget and National Planning, Clem Agba said that the government would not tinker with the 2020 budget now as the increase in oil price may not be sustainable.
He said, “Considering the recent event that happened in the Middle-East and the soaring oil prices. Like you know, for now it’s a one off event and so we will be monitoring the situation.
“If it becomes sustainable, then there might be need to adjust. But for now, we will maintain the benchmark rate that we have established as the budget proposal for 2020.”
On the Nigerian Economic Summit scheduled to hold next month in Abuja, she said the summit has over the years helped to shape many of the reform policies underpinning the evolution of our economic growth and development.
She said through the summit with theme, “Nigeria 2050: Shifting gears,” the government would be able to address issues of good governance as a path to sustainable human and economic development.
Ahmed said the forum would also provide a timely opportunity for a national economic review and create a consensus among all Nigerians on the need to ensure that Nigerians take advantage of the opportunities that exist to increase productivity and create jobs.
She said, “Shifting gears emphasize the imperatives for the country to move to a more robust competitive private sector economy while discussing the implication of the projected population of the country hitting over 400 million by 2050 with 65 per cent of the population under the age of 35.
“This figure we know will put an unimaginable pressure on our educational institutions, structures, resources and manpower.
“In this regard, it is only a competitive private sector led economy that will drive this process and ensure economic prosperity all for Nigerians.”
To ensure a competitive economy, she said there is need to have stable macroeconomic conditions and business climate that would keep transaction costs low, thereby encouraging savings, investment and job creation.
The finance minister said Nigeria’s economic prosperity depends on the productivity of its human and natural resources.
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