- The Senate is making plans to handle the effect of Nigeria's dwindling revenue
- According to the upper legislative chamber, devaluation of the naira might be an option
- Senate noted that following the fall in the price of crude oil, backup measures must be in place
The Nigerian Senate is considering new moves to devalue the naira, remove the petroleum subsidy and downsize the 2020 budget to cushion the effects of the global crash in crude oil prices.
This information was disclosed in a report submitted by the Senate joint committee on finance, appropriations, national planning and petroleum resources (upstream).
According to the upper chamber, contingency measures must be put in place with the continuous fall in the price of crude oil.
Solomon Adeola Olamilekan, the chiarman Senate committee on finance, said the devaluation of the naira, removal of fuel subsidy, among others were on the table.
Olamilekan while presenting the report during a plenary session revealed that it is considering merger of federal government agencies, reduction of the production cost of crude oil, among others.
He said: “Unlocking of revenue as a result of Gas flaring which runs into several billions of dollars; devaluation of Naira; and removal of oil subsidy. The short term solution is to address the sharp drop in the crude oil price which is creating difficulties in funding the 2020 Appropriation Act as passed by the National Assembly.
“The long term solution discussed is the need to consider and pass the Petroleum Industry Bill (PIB), which is yet to laid before the National Assembly. This will address the issue of cost of production and gas flaring where the country’s resources is going down the drain and other issues that might affect the petroleum sector.”
Ahmad Lawan, the Senate president expressed optimism that Nigeria will come out stronger despite the challenges.
Legit.ng previously reported that the Nigerian economy may be facing another critical episode following the drastic fall of the oil price in the international market to as low as $35 per barrel.
The unfortunate situation led to panic among the country's Bureau De Change (BDC) operators, a development that eventually led to the naira being exchanged for N405 and N420 to a dollar on Thursday, March 12.
In a related development, all deposit money banks in Nigeria have been urged to restructure loan terms and tenors to households and businesses affected by the coronavirus outbreak.
The Central Bank of Nigeria (CBN) gave the directive when Godwin Emefiele addressed journalists in Abuja. The CBN governor said the interest rate of its intervention programmes has been cut to 5% from 9%.
Similarly, Africa’s richest man, Alhaji Aliko Dangote, on Wednesday, March 11, revealed that Nigeria’s economy is not working as he gave a painful verdict on efforts by governments to transform the nation’s economy.
Speaking at the roundtable parley with the CBN Governor, Godwin Emefiele, with the theme “Going for Growth 2.0, the business mogul said Nigeria’s economic diversification programme has been largely sluggish and elusive.
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