Respite for Nigeria as crude oil hits $70 per barrel

Crude oil prices rose above $70 a barrel yesterday, signalling that production cuts by the Organisation of the Petroleum Exporting Countries (OPEC) and non-OPEC had helped in tightening supplies.

International Benchmark Brent crude oil sold for $70.13 per barrel during trading hours.

Also, the Nigeria Bonny Light crude oil went for $69.58 per barrel, far above the country’s 2018 budget benchmark of N45 per barrel.

A production-cutting pact between OPEC and non-OPEC had helped to boost the prices of crude in the last few months, hitting levels not achieved since 2014.

With the new development Nigeria is to make additional $25 per barrel.

Speaking on appropriate utilisation of the country’s oil revenue, the Director-General of the Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, noted that there was need for the Federal Government to mobilise private sector capital into the infrastructure space. 

This, he said, should include a broad spectrum of policies – tax, monetary, trade policy and investment.

He stated: “There is an urgent need to save the private sector and investors from the agony of persistent gridlock at the Apapa and Tin-Can ports, which account for over 70 per cent of import and export cargo into the country.

The LCCI boss reminded President Muhammadu of his promises to the oil-bearing communities of the Niger Delta, urging him to fulfil them.

To the NEITI’s Director of Communications, Dr. Orji Ogbonnaya Orji, the time had come for the country to embrace a robust savings culture.

“Our country’s experience over the current economic recession and volatility in the oil market has made this decision quite imperative,” he said.

According to him, under the circumstance, and given the importance of healthy savings as one of the tools for tackling resource curse, NEITI strongly recommends that the federating units especially, the federal and the state governments, should seek speedy resolution of all pending cases at the Supreme Court on the constitutionality of remittances to the Excess Crude Account (ECA) and the Nigeria Sovereign Investment Authority (NSIA).

He said NEITI is of the view that all the oil revenue savings in the ECA and Stabilisation Fund should be moved to the Nigeria Sovereign Wealth Fund.

“In making this recommendation, NEITI is persuaded by the recent ranking of NSIA by the global Sovereign Wealth Institute Transparency Index, the highest by an African Sovereign Wealth Fund. Besides, the SWF is the only one of the three funds that has recorded profit. It is also our hope that SWF should be strengthened with appropriate guarantees on transparent and accountable governance to re-assure all stakeholders.

“Above all, the time to delink government expenditure from oil revenues and pursue prudent macro-economic policies is now. These measures are critical success factors to rescue Nigeria from the resource curse syndrome, save for the rainy day and the future generation before the oil runs out in 38 years’ time as already predicted by experts,” Orji added.