By Uche Mbah
There are palpable fears from economic intelligence quarters that the Federal Government may be forced to devalue the Naira once Again if the current global trends in global oil output persist. Those that this Magazine talked to last week are unanimous that if the current trend of oil boom continues, its sustainability is questionable unless there is a drastic act on the part of any of the world powers. American President Trump has been a bull in the China shop both locally and internationally, and may trigger global crisis situations that will increases global oil consumptions.
“Unless this unpredictable man, Trump, does something drastic-like throwing a bomb somewhere-the upward swing of oil prices cannot be sustained”, an internal auditor of a global oil concern told this Magazine last week. “And you cannot rule that out”.
Brent price has hit a four year high early October but is already exhibiting traits of the expressed fears. It has tumbled 25% since then, with analysts expressing heightened fear of a direct tumble. Some optimists had expected a rise to about $100 a barrel
The Nigerian economy is benchmarked with oil revenue, even though non-oil revenue account for a greater percentage of national earnings. With the level of financial profligacy associated with the All Progressives Congress central government, devaluation appears inevitable.
According to Debt Management Office, Nigeria’s external debt profile has risen to $11 billion as at last week as against the $ 9.4 billion recorded last March. Similarly, domestic debt profile was said to have risen to N11 trillion. So called recovered loots from corrupt officers have not been publicly accounted for. The borrowings were said to be to fund the budgets but these are usually less than 405 implementation.
“With the country’s books in the red, and the 2019 election in the offing, any fall in the oil price will result in devaluation of the Naira”, the expert said.