- Economic Council Warns of Recession as Oil Drops to $25
President Buhari Advisory Council on economic matters on Tuesday warned of severe economic consequences if the fast-spreading coronavirus was not contained in the country.
The council led by Prof Doyin Salami met with the President at the State House, Abuja.
The council advised that the president consider immediate cuts in the budget to prevent the nation from receding into another recession. The council added that a rising unemployment rate, falling foreign reserves and trade imbalance were other challenges that could arise from the current situation.
Mr. Femi Adesina, Presidential Media aide, after the closed-door meeting, said these were among the council observations.
The statement reads, “Noting that many countries around the world may go into economic recession, the PEAC advocated hard work for Nigeria to keep its head above the waters.
“Recommending, among others, a possible revision of the 2020 budget, with priority spending on healthcare, re-prioritisation of expenditure on infrastructure to focus on projects nearing completion with pro-poor effects, curtailing recurrent expenditure, mobilising the private sector to strengthen health sector infrastructure, and boosting of government revenue, the PEAC stressed that the projections may seem dire, but the worst may be avoided with hard work and scrupulous implementation of policies.”
President Buhari, however, reassured Nigerians that his administration was working on measures to ensure that the nation survived the current situation.
The president added that he was well aware that crude oil has plunged below the nation’s benchmark of $57 per barrel for 2020.
“We will see how to survive fallen prices, as we already envisaged the problem,” the President said.
The brent crude oil, against which Nigerian oil is measured, dropped to $25.85 per barrel on Wednesday after Saudi Arabia announced it would pump more oil in April and plan to sell that much into the already saturated global oil market.
This coupled with the global health crisis continues to hurt the global demand for the commodity, with the world’s largest importer of oil, China, cutting down on imports as economic activities subside.
