Dipo Olowookere
By Dipo Olowookere
Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, is holding a crucial meeting with Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, as well as other stakeholders.
The meeting is taking place in Abuja and the main agenda is to discuss the present state of the economy as well as the declining price of crude oil at the global market.
On Monday morning, the Brent crude, under which the country’s oil is priced, fell to $33 per barrel, about $24 below the $57 benchmark set in the 2020 budget by President Muhammadu Buhari.
This caused panic within the investment community and caused the stock market to crash by 2.41 percent at the close of transactions today.
Worried that things might get worse, especially as Saudi Arabia has started a oil price war after Russia refused an output cap deal last Friday, the fiscal and monetary authorities in Nigeria have deemed it fit to chart a way forward.
Last week, Mrs Ahmed hinted that government may be forced to review the 2020 budget, with the present situation, this move may be fast tracked.
According to what Business Post was reliably informed, government is allegedly pushing the apex bank to work on the benchmark interest rate to douse the tension in the market.
Some days ago, the National Bureau of Statistics (NBS) said inflation in Nigeria rose to 12.13 percent in January 2020 and with interest rates of most investment tools at an average of 4-5 percent and lending rate above 20 percent, it is very difficult to have people invest in the economy.
A source who claimed to be privy with today’s meeting said efforts are being made to make the central bank announce an emergency rate cut to stimulate the economy.
A similar situation happened few days ago in the United States, where rates were marginally lowered as a result of the dreaded coronavirus (COVID-19), which has badly affected the global economy.
