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Experts have canvassed urgent quick fixes to survive looming fiscal turbulence and possible bankruptcy, as oil prices have fallen to as low as $10 from $70 per barrel in 2019 or 2020 Budget benchmark of $55 per barrel.
They said the Federal Government should do everything possible to avert bankruptcy even after the COVID-19 pandemic has been effectively contained, insisting that the free-fall in oil prices in the international market occasioned by the coronavirus not only threatens the country’s revenue but also other revenue thresholds.
Specifically, they argued that taxes, customs duties, investments in the upstream, midstream and downstream sectors of the oil industry would be negatively affected by the severe impact on unemployment and the economy.
A Development Economist, Odilim Enwegbara said, “To avert a looming bankruptcy Nigeria should, among other things, suspend all non-critical capital expenditures in the 2020 budget.
“Given that this will require amendment of the 2020 Appropriation Act, presidency should send a bill to the National Assembly seeking its speedy amendment.
“It should discuss with all government creditors to insist on giving a 12-month moratorium as part of government’s debt restructuring inevitability as government’s coronavirus debt sustainability policy.
“With this, government will save over N2 trillion expected to be spent on the 2020 debt service obligations, while the Central Bank of Nigeria (CBN) should inject liquidity into the agricultural sector to help farmers and agribusinesses involved in food processing. The agricultural special funds should be accessed by farmers at zero percent interest rate with a two year moratorium.”
Another Development Economist and Chief Executive Officer of Global Analytics Consulting Limited, Tope Fasua, advocated a stimulus package by the CBN to create liquidity for investors to set up businesses that would help in ramping up revenue to fill gaps created by the drought in oil revenues.
“The Federal Government should issue a local war bond of at least N20tr or $65b to stave off the shortfalls in revenue in the next three years and finance the collapsed budgets for that period.
“This amount will also be used in reflating and rebooting the economy, which has already gone into recession. The bond could attract interest rates between 10-13 per cent. Lending rates in commercial banks should also be crashed to make this project attractive. This could be done by forcing down MPR several notches,” he stated.
Also, Executive Chairman of Analytical Economics, Professor Godwin Owoh, has declared that Nigeria would experience bankruptcy due to fall of crude oil revenues except handlers of the nation’s economy stop plundering the treasury.
Owoh, a former Special Adviser to the Governor of the Central Bank of Nigeria (CBN) stated this in in response to the fall of crude oil prices in the international market.
He said, “The best quick win for Nigeria is to stop the economic bleeding that has persisted for a long time now, the blood bank is running out!
“Nigeria’s economy today is an economy in which three macroeconomic prices are set at edge, and principally weaved with a corrugated bead of tokenism. No such economy is taken seriously even by its managers.
“Nigeria had not built any strategic oil reserves with an underlying assets because individuals own national oil wells, politicians abuse each other to the point of death where control of oil revenue is the issue. Ways and means slush remained unabated and people are locked down without closing the public treasury!
