Crude oil prices have just fallen to $11 per barrel. What’s does this mean for an oil dependent economy like Nigeria?
Nigeria’s original 2020 budget was pegged at a price benchmark of $57 per barrel and the new budget at $30.This means that over 50% of money needed to fund the 2020 budget will come from borrowing. Our debt profile will worsen, and economic growth will be terribly slow on a long term basis.
This accompanied with fall in aggregate demand & rise in government spending means that we are headed for unbearable economic realities. Better wake up!
Already there is:
• decline in consumption due to lockdown & wealth erosion.
• decline in investments due to market uncertainties.
• decline in net export due to hampered supply chains, embargoes and decrease in demand.
• Increase govt spending due to expansionary fiscal policies & health system upgrade.
If You still need to be convinced to think money, then you must exam yourself again.
You need to learn different ways of making money (no matter how little). You need to diversify your streams of income. You should not just be bothered, you should get ready.
