The Nigerian Employers Consultative Association of Nigeria (NECA) has disclosed that falling oil price has resulted in a loss of about $2billion in federal government’s revenue. This is even as the nation’s economy continues to struggles under recession.
NECA president, Mr Larry Ettah, said the government required about $3billion monthly to function, but its receivable was about $1 billion per month, reflecting a drop of $2 billion.
Consequently, the NECA boss called on the government to direct more effort to address the economic challenges, saying that government should look beyond oil because the price of crude would remain low.
According to him, gone were the days the price of oil was $100 dollar per barrel in the international market.
“The oil price will not go up to $100 per barrel as we used to enjoy. Gone are the days when we used to buy it for $80, $90 or $100 per barrel. We have to be living in a restructured environment in which case we have to be looking into how to diversify the economy. And I think this is a painful opportunity for us which we have to take,” he stated.
He pointed out that for the country to exit the recession, the government should work on the power sector, saying it needed to generate between 15,000 megawatts and 20,000 megawatts (MW) for it to have a stable economy.
“It is a shameful thing that while South Africa is talking of 40,000Mw, we are still celebrating 3,000Mw. The minimum we should be generating is between 15,000Mw and 20,000Mw. What it means is that there will be a lot of spending on power generation,” Etta said.
He pointed out that another area the government needed to address was policy formulation. Ettah said though the economy was in a mess when the administration came in, it had grown worse because of wrong policy.
“For instance, if we are talking of deregulating, the foreign exchange (forex) market, imagine if we have done this one year ago, the foreign capital inflow would have fared better. We should not forget that the problem of the Niger Delta, which has also affected our production, is there,” he added.