How oil price has been infected by Covid-19 and other areas that are vulnerable to the virus
Oil price has been infected by #covid19, may spread virus to revenue generation, external reserve, exchange rate and the ability of federal and state governments to implement their 2020 budgets. #coronavirus
With OPEC and Russia unable to agree on oil production cut amid slowing global growth and falling demand for oil as a result of Covid-19, one can simply say the global oil price is suffering from Coronavirus infection.
The depressed demand for oil means lower crude prices unless there is a cut in supply to moderate price.
At about $45, the current price range of crude oil is over 20% below Nigeria's budget benchmark of $57 per barrel.
If this persists then it is a matter of time before Nigeria's external reserve, Naira exchange rate, revenue generation and budget implementation will catch the infection.
It will become even more difficult for the FIRS to meet its already ambitious revenue target of N8.5 trillion and the Nigeria Customs Service should also expect a significant decline in import duties and import VAT collections.
The only good news for Nigeria in all of these is that government should spend less on petrol subsidy or even profit from the current pump price. This may yet be another opportunity to fully deregulate petroleum products pricing without the attendant impact of a price hike.
It will also be useful for FG to reassess and re-prioritise the projects outlined under the external borrowing plan of $22.7bn recently approved by the National Assembly as the cost of borrowing is likely to go up. #my2cents
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4yWhat a way to put. I hope the government can rise to the occasion by rolling out measure that will help us deal with the economic crisis that is looming
ACA | Digital Marketer | White Space Facilitator | System & Process Optimizer | Brand Strategist | Content Writer.
4yIronically, Covid-19 has procreated multiple conspiracy theories.
Accountant at National lottery regulatory commission
4yIs it safe to say we are already in another bout of Recession?
Business Analyst |Change Delivery| Transformation
4yMostly importantly is the govt to adjust their fiscal policies in line with the development. A proactive approach will save a lot and limit exposure to the bumpy tide of global economic waves.