Don't Miss


Home   >   Business   >   Industries   >   Economy   >   Oil slump taking toll on economy – Minister

Oil slump taking toll on economy – Minister

By on December 16, 2014

The Federal Government has admitted that the persistent drop in global oil prices is already taking a toll on the country’s economy.

The Minister of State for Finance, Ambassador Bashir Yuguda, stated this while speaking on Friday night at the 25th anniversary dinner of the Nigeria Deposit Insurance Corporation in Abuja.

He said with the drop in oil prices and the devaluation of the nation’s currency, there is a need for the regulators of the banking system to “prepare, position and proactively react to the circumstances as they occur.”

He said, “Another time for caution is here. Red-flashes have once again appeared on the global horizon which we must, as a nation, take note of, and practically prepare for.

“Any nation that does not learn from previous crisis is indeed unwittingly placing itself squarely in the line of fire. Similar events to those which heralded the most recent recession are once again playing out. It is unfortunate to note that the falling oil prices have already begun to take a toll on us.

“We have seen in the most recent last, the value of the naira battling to remain at a reasonable level against other foreign currencies. Projecting forward slightly, this already is having an effect on 2015 budget by way of the announced cuts and belt-tightening measures.”

The Federal Government had, following the drop in oil prices, adjusted the budget benchmark twice from the initial $77 per barrel to $73 and then to the current price of $65.

As of Friday, figures obtained from the website of the Organisation of Petroleum Exporting Countries put the price of crude oil at $60.5 per barrel.

Also speaking at the event, the NDIC Managing Director, Alhaji Umaru Ibrahim, said the corporation’s Act currently being amended by the National Assembly would remove all legal impediments that usually jeopardised the interest of depositors of failed banks.

He said the practice whereby aggrieved shareholders and management of liquidated banks often resorted to court action to stop the corporation from exercising its mandate was affecting the payment of insured depositors of failed banks.

 

[Punch]