The Central Bank of Nigeria (CBN) has warned the federal government against embarking on a spending spree as crude oil price rises steadily above benchmark level approved in the 2019 budget.
The crude oil benchmark in the 2019 budget is sixty dollars per barrel at two-point-three million barrels per day output level, but the price is presently almost at seventy dollars per barrel. The Monetary Policy Committee of the Apex bank on Tuesday urged the government to begin to save for the rainy day
In its communiqué 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 also directed the management of the apex bank to provide a mechanism for limiting Deposit Money Banks’ access to government securities. The CBN governor said the move would help to redirect the lending focus of banks to the private sector and boost the much needed growth in the economy.
The committee, according to him, also encouraged financial intermediating institutions to ensure that loans to the agricultural sector were channelled effectively to end users. Emefiele said that the committee urged the relevant authorities to stiffen efforts to address the security challenges and improve food production.