Tuesday, June 3, 2025
The Lagos Today
  • Login
No Result
View All Result
No Result
View All Result
The Lagos Today
No Result
View All Result
Home Business

Nigeria Is Not Reaping Benefits Of Rising Oil Price- CBN

by Eucharia Egwuma
May 13, 2022
in Business
Reading Time: 3 mins read
0
0
CBN reduces MPC rate from 13.5% to 12.5% over Coronavirus
Share on FacebookShare on Twitter

The rising oil price triggered by the ongoing War between Russia and Ukraine, normally
is considered to be beneficial to a major oil exporter like Nigeria, however, the Central Bank of Nigeria (CBN) has indicated that the recent increase in oil prices does not equate to higher revenue nor does it improve the external reserves of the Nigerian economy.

This was disclosed by Edward Lametek Adamu, the Deputy Governor of the CBN at the last Monetary Policy Council meeting held by the CBN.

He stated that inflation remains a major concern for global policymakers and that the war’s adverse consequences are already being felt in Nigeria.

Adamu stated that commodity prices are rising fast as investors embrace gold, and global demand for crude oil appears to outstrip supply, owing to the sanctions on Russia.

However, he believes that Nigeria would not reap the benefits of a rising oil price, stating; “crude oil prices are high and could remain so for some time. Unfortunately, this is neither translating to more revenues for government nor increased accretion to the country’s external reserves.”

He also warned that oil earnings would be offset by fuel subsidies and increased production costs.

“Under this condition, the cost of subsidy on PMS will increase, further limiting the fiscal space for supporting growth. Other downside risks to growth emanating from the war in Ukraine include rising gas prices as well as the cost of some intermediate goods. Manufacturing and agriculture could take a hit from this development,” he said.

He added, “it appears to me that domestic output recovery is severely threatened. In effect, the CBN cannot at this time relent in supporting growth using monetary policy and development finance interventions which have so far proved to be among the economy’s critical safety nets.”

Nigeria’s external reserve fell by 0.36% on Monday, May 9th, to $39.17 billion, down from $39.31 billion the day before.

The fall in external reserves can be linked to the Central Bank’s ongoing intervention in the foreign exchange market to maintain the local currency’s stability in the official Investors and Exporters (I&E) window.

The Nigerian government also increased the Premium Motor Spirit (PMS) subsidy budget amount for 2022 by N442.72 billion, from N3.557 trillion to N4 trillion. The increase in fuel subsidies comes as crude oil prices rise and the FG abandons plans to phase down subsidies in 2022.

Nigeria’s refusal to remove gasoline subsidies, according to Nairametrics, will result in opportunity costs in the areas of health, education, and infrastructure.

Nonetheless, the world bank has also forecasted that Nigeria’s economy is expected to grow by 2.5% in 2022 and 2.8% by 2023. This is owing to the growth being driven by the recovery in non-oil sectors; The bank stated that oil production across the region remained below pre-pandemic levels because of disruptions in maintenance work and declining investment in extractive industries.

Share this:

  • Facebook
  • X

Like this:

Like Loading...
Tags: CBNCentral Bank of NIgeriaFederal Government of NigeriaNigeriaOil price hikeOil prices
Previous Post

Fuel Scarcity: FG Says NNPC Has Sufficient PMS To Last Over 47 Days

Next Post

Naira Depreciates Further To N607/$1 in P2P Market

Eucharia Egwuma

Eucharia Egwuma

Related Posts

Ghana’s Kofa Secures $8.1M Pre-Series A Funding to Drive Clean Energy Access Across Urban Africa

Ghana’s Kofa Secures $8.1M Pre-Series A Funding to Drive Clean Energy Access Across Urban Africa

by Iyanu Ale
May 2, 2025
0

Ghanaian energy tech startup Kofa has successfully raised $8.1 million in a pre-Series A funding round to scale its AI-powered...

South Africa’s CureRoot Leverages AI to Unlock New Medicines from African Medicinal Plants

South Africa’s CureRoot Leverages AI to Unlock New Medicines from African Medicinal Plants

by Iyanu Ale
April 28, 2025
0

South African startup CureRoot is pioneering a new frontier in pharmaceutical innovation by harnessing artificial intelligence (AI) to discover novel...

Next Post
Abuja Banks Obey CBN’s Forex Policy, Sells Dollar at N412

Naira Depreciates Further To N607/$1 in P2P Market

Please login to join discussion

Recommended

Ex-Oyo state governor, Abiola Ajimobi dies in Lagos

Ex-Oyo state governor, Abiola Ajimobi dies in Lagos

5 years ago
Senate Rejects Buhari’s $700m Loan Request To Fund Water Project

Buhari Signs Nigerian Tourism Development Authority (NTDA) Act, 2022 Into Law

2 years ago

Popular News

    Connect with us

    Tags

    #EndSARS 2023 Elections 2023 polls 2023 Presidency ACCIDENT Africa All progressives Congress APC Asiwaju Bola Tinubu Babajide Sanwo-Olu CBN Central Bank of NIgeria Central Bank of Nigeria (CBN) Coronavirus pandemic Covid-19 Covid-19 in Lagos Covid-19 in Nigeria Covid-19 Vaccine Cryptocurrency Economic and Financial Crimes Commission EFCC Federal Government Federal Government of Nigeria Fraud Gov. Sanwo-Olu House of Representatives Lagos-Ibadan expressway Lagos state Lagos State Government Lagos State House of Assembly Lagos State Police command Muhammadu Buhari Murder Naira NDLEA Nigeria Nigeria Customs Service Nigerian Economy Nigeria Police Force Rape Strike action TECH UK United Kingdom US

    News

    Opinion

    © 2020 The Lagos Today - Nkali.

    Welcome Back!

    Login to your account below

    Forgotten Password?

    Retrieve your password

    Please enter your username or email address to reset your password.

    Log In
    No Result
    View All Result

    © 2020 The Lagos Today - Nkali.

    %d