Economists and other stakeholders in the oil and gas sector yesterday predicted a bumpy road for Nigeria’s N146.96 trillion economy, insisting that prevailing realities at the international oil market could worsen the nation’s fiscal outlook, especially the implementation of the N10.33 trillion 2020 budget. They also raised the alarm over another slip into recession and shortage of foreign exchange, given that the nation’s foreign reserve has depleted to about $40.95 billion.
The experts spoke ahead of a meeting of the Organisation of Petroleum Exporting Countries (OPEC) and other allies next tomorrow, where an agreement that could impact future oil prices may be reached. Though they expressed optimism in the continuous extension of oil production cut by OPEC and its allies to stabilise oil prices at the international market, they noted that Nigeria’s economy, with reference especially to the 2020 budget, remains volatile.
In the proposed 2020 budget, the Federal Government estimated oil sales to stand at 2.18 million bpd at a price of $57 per barrel, while the exchange rate is expected to remain N305 per dollar. But last week, the prices fell, eroding the increase recorded in November. West Texas Intermediate dropped more than four percent to settle at $55.17; Brent plummeted by $1.44 to settle at $62.43, while Bonny Light slumped by $1.9 to settle at $62.15. On Monday afternoon, WTI stood at $56.63, Brent at $62.08 while Bonny Light was $62.15.