Listen to article
|
This week’s petrol price crisis has unveiled a maelstrom of economic uncertainty, prompting a coterie of financial and economic experts to call for swift action. They caution that the Federal Government’s economic reforms will precipitate more harm, imperiling the nation’s economic stability in the short- and medium-term.
The federal government has been urging citizens to hang in there, promising that better days are ahead. However, economists are sounding a note of caution, suggesting that the economic recovery may be a slow burn, with 2027 marking the beginning of a potential upswing.
Nigerians are being asked to be patient as the federal government works to revitalize the economy. But experts are cautioning that the process will take time, with 2027 emerging as a potential milestone in the country’s journey towards economic recovery.
The petroleum sector authorities have made a fresh move that’s unlikely to go down well with Nigerians – raising the pump price of fuel in the midst of a protracted scarcity that’s now entering its eighth week.
The alarming rise in fuel prices to between N900 and N1,200 per litre has sparked fears among experts of an impending economic downturn, which could spell even more trouble for Nigerians already grappling with the challenges of everyday life.
The economic outlook is bleak, with a perfect storm of challenges weighing heavily on Nigerians. Inflation is on the rise, joblessness is increasing, and the purchasing power of citizens is dwindling. To make matters worse, utility bills and the cost of living are soaring, all combining to erode the standard of living.
Looking into what the future holds for Nigerians, the analysts noted that the economic recovery would largely depend on key factors such as oil sector recovery, foreign exchange and interest rate stability, and agricultural productivity.
However, they also said that on all the factors odds are stacked much higher than positive expectations.
Nigeria’s economic troubles were further compounded when the price of its prized Bonny Light crude oil nosedived to $73 per barrel, the lowest point this year. This sudden drop has raised fresh concerns about the country’s reliance on oil exports.
Read also: Hardship: Imo Youths Resort To Unusual Survival Strategies
The recent slump in crude oil prices to $73 per barrel has put Nigeria’s budget implementation in jeopardy, as the budget was predicated on a higher price of $77 per barrel. This new challenge comes on the heels of persistent struggles to meet the budgeted oil production target of 1.7 million barrels per day.
Nigeria’s oil production has been stuck at a dismal average of 1.4 million barrels per day since the start of the year, falling short of the budgeted target.
This, combined with the recent price slump, has thrown the country’s fiscal plan for 2024 into disarray, just months before the year’s end. As a result, the government’s economic recovery goals for the year are now all but unattainable.
The oil sector’s performance is crucial to Nigeria’s economy, which relies heavily on oil revenues – to the tune of 80 percent. Therefore, the recent decline in oil earnings spells trouble for the external sector, particularly the foreign reserves, which took a hit of over $500 million in the last week of August 2024, sliding back to $36.3 billion.