Excess Oil Revenue: CBN Warns Government

With crude oil price rising steadily above benchmark level approved in the 2019 budget

In its communique at the end of its two-day meeting in Abuja on Tuesday, the committee asked the federal government to urgently build financial buffers through a more realistic crude oil price benchmark in its budget.

the committee said “The crude oil benchmark in the 2019 budget is $60 per barrel at 2.3 million barrels per day output level. Now that price is almost at $70 per barrel, what the MPC is saying is that there is no need for government to say it should begin to spend since they have more money by increasing the budget benchmark from $60 per barrel to say $69 or $70.

“If the money is realised between $69 and $72, we should save and build buffer for the rainy day when it happens,”.

Also, the committee recommended a framework to speed up the recovery of delinquent loans in the banking system and open up access to credits to the real sector to boost growth of the economy.

The committee also called on the CBN to urgently establish modalities to promote consumer and mortgage lending in the economy to boost the flow of credit to the real sector and drive output growth.