Low Oil Prices: Expert Wants Government to Focus on Fiscal Policies to Strengthen Economy
Bank-Anthony Okoroafor, former President, Petroleum Technology Association of Nigeria (PETAN), on Wednesday said government must focus on fiscal policies to survive the impact of the global crash of oil prices.
Okoroafor said this in an Interview with News Agency of Nigeria (NAN) in Abuja.
According to him, the fiscal policies will be able to drive investment and government must ensure strict measures to help the nation’s economy that depends solely on oil revenue.
Okoroafor said that various ways to strengthen the economy included full de-regulation of the downstream oil sector, one year moratorium on all bank loans repayments for businesses and interest rate cuts.
He said also, fiscal policies to make investments very attractive in Nigeria, making Local content a national agenda, single foreign exchange rate and full privitisation of the refineries and all assets consuming government funds.
The former PETAN president said that government should stop putting money on non productive investments or sectors and begin massive investment in healthcare, education and capacity building.
“ This is not a good time for our economy. Our 2020 budget was based on $57 dollars per barrel of crude oil and about 2.18 million barrels of oil per day.
“Our economy is in great danger with the Coronavirus causing blockages in economic activity, the Russia/Saudi oil price war and the weak oil demand from China.
”Also, with our budget premised on 2.45 trillion deficit, our weak and non existent infrastructure, our dwindling foreign reserves, and our blatant refusal to diversify during boom times, we cannot even implement the budget.
“We cannot raise the required revenue from crude sales or taxes. The general economic landscape does not look good.
“The general welfare of the masses will remain pathetic and depressing for a long time,’’ he said.
Okoroafor said that Nigerian government had not demonstrated that Nigeria had ever reaped huge oil windfall.
He said that Nigeria had gotten fair share of oil prices windfall as a major oil producer and the sixth in the world.
“What strategic advantage did we get from the oil windfall?
”Why should Nigeria be struggling with oil price fluctuation every now and then without an attempt to resolve it once and for all?
“With all these suggestion, we can still turn around with bold and strategic actions like using the opportunity of this Coronavirus to make production changes in our economy,’’ he said.