NECA canvasses sustainable policies for economic recovery
– No technology yet to displace oil, gas commodities’
The Nigeria Employers Consultative Association (NECA) has urged fiscal and monetary authorities to develop more aggressive and decisive policies to sustain economic recovery in the wake of further reduction in oil prices.
Director-General of NECA, Timothy Olawale, who stated this yesterday in Lagos said: “In our analysis of the country’s economy, we observed a strong correlation between global oil prices (Brent) and the country’s Gross Domestic Product (GDP) between the first quarters of 2014 and 2020.
“This indicates that the direction of growth is pretty much determined by the direction of oil prices. It can be adduced that a dollar increase in global oil prices corresponds with an average 0.1 per cent rise in growth.
“A similar trend was witnessed in Q2 2017 when the country exited recession. It was not buoyed by government policies, but rather rebound in oil prices. This calls for more drastic management of the country’s economy from the global shock of oil prices,” he added.
Olawale noted that the slowdown in the GDP growth reflected the earliest effects of the disruptions on the non-oil economy, coupled with an escalating war of words between the United States and China, which resulted in low demand for oil globally.
He recalled that the shutdown of the economy commenced in April due to the COVID-19 pandemic, and as such, the real impact of the virus would be felt in the second quarter GDP result.
Meanwhile, contrary to general assertions that the demand for oil would reduce soon due to new technologies, Chairman, Board of Directors, Ibom Power Company, Etido Inyang, has predicted that oil and gas would remain dominant commodities for the foreseeable future.
He made the observation while fielding questions from journalists in Uyo, Akwa Ibom State yesterday, stressing that with about 25 years in the oil and gas industry, oil still has a future as the technology to replace it had not yet been developed.
Inyang argued that trends have shown that oil price had never fluctuated to a point at which it stayed low forever, pointing out that although the price of the commodity was low currently, it would rebound once the coronavirus crisis is over.
The erstwhile Commissioner for Special Duties in the state also disclosed that the Federal Government was about to bid for marginal fields, advising indigenes to vie for the facilities.
He pointed out that between13 and 15 fields would go to Akwa Ibom.
Inyang, therefore, cautioned against allowing only external forces to benefit from ExxonMobil and Total Plc’s prolific fields.