Fall in oil price and its effect on our economy

Recently, the Federal Government introduced some austerity measures and scaled down the crude oil bench mark for the 2015 budget. This was in a bid to shield the economy from falling crude oil prices from $78 to $ 43.23 per barrel as at 26th January 2015.
According to the Minister of Finance and the Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala, the decision to cut revenue projection was part of measures designed to maintain economic stability, boost non-oil revenues, plug loopholes and waste, as well as cut unnecessary expenditures by initiating luxury goods tax; all these will help Nigeria cope with the situation.

Do you think that these measures are for the interest of our economy?
What are your views?

Omada Joshua: Well, I am not an economist so I might not be in the position to analyze that. Taking it from the lay mans perspective, I can say that the problem we have in Nigeria is transparency; and as regards initiating the luxury goods tax, how are we sure that they will implement it so as to be able to match up with fall of oil price in the International market? As far as I know, they are the people that acquire privately those luxury goods in question.
Nenadi Musa: The fall in the price of crude oil in the international market came as an economic and even political shock around the world. This means that we are more affected due to our sole dependence in oil as our foreign revenue. The Federal Government has also done well to point different ways of tackling this sudden development and I think they are good and should be encouraged to implement them.

Hadiza Saliu: Giving Nigeria advice or pointing out views about Nigeria is like washing a pig. So leave them alone until there is no money to share. Power supply and functioning refineries would have solved these problems especially now that we try to reduce foreign spending; but we still export our oil to be refined and imported back at a very high rate. Instead of the Federal Government to sell that same oil at a reduced rate, they rather increase the price so as not to devalue our naira and also meet with the international standard. The so called leaders don’t care about Nigeria, rather they only care about their bank accounts, send their children to best schools in the world. Now everyone is going to see real hardship caused by lack of planning.

Baraya Agie: The austerity measures proposed by the government would further enrich the affluent thereby putting an average Nigerians into more hardship and economic depression. So many countries that embarked upon this austerity measure in the Euro zone have not solved their economic problems in the past five years since the global financial crises. All what austerity has done is to tighten the grip of the wealthy on the economy, while weakening the position of the middle class and the poor.

Haruna Sada: About 80 per cent of our earnings is from oil and so it is not a surprise that the government is adopting austerity measures, considering the fast decline in oil price. This is actually the beginning of things to happen. Apart from imposing tax on luxuries, they should look at how to diversify the economy by creating the enabling environment so that industries can thrive. Increasing or taxing more utilities is not the major solution; the government should now make more effort at diversifying the economy. They should ensure that the agricultural sector and other sectors are working. Nigerians may not worry much about the tax issues because they are expected, but tax revenue should be used wisely. It should not end in the pockets of a few individuals. The fact that the country’s earnings are mostly from oil means that a fall in the price of the commodity will deny the country a lot of income to provide roads, power plants and many other things that will benefit the ordinary Nigerian.

Anchored by: Okoye Chizzy

Related Articles

About the author

Related

JOIN THE DISCUSSION