“I challenge Nigerian leaders to use what they have and diversify for sustainable economic growth.”
With oil prices below the budget benchmark, there are concerns about the quality of investment attracted to the economy, especially when investors are becoming jittery about the stability of the naira and the country’s capacity to service its debts.
In Q3 2019, Nigeria recorded a capital importation volume of $5.62 billion. Similarly, the total value of capital importation in 2019 stood at $23.99 billion, compared to $16.81 billion in 2018, representing a growth of 42.69 per cent between the two periods. Similarly, the case for devaluation rests on a thin line between economics and politics. Whilst it is probably economically viable to devalue the naira, devaluation is considered a negative action in the political sphere.
Already, oil revenue accounts for about 85 per cent of the country’s foreign exchange earnings and is the major driver of accretion to the foreign reserves. The slump in oil price and the associated adverse expectations would put fresh pressures on the reserves. It was at an all-time low of $36.18 billion as of Monday, March 9, 2020.
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