Good move by the Central Bank of Nigeria (CBN) to go out and put its message (see press release below). Yet, the comment from NNPC this week makes this also challenging. Unlike most countries, in the altar of Nigeria’s economy, the supreme high priest is the GMD of NNPC, not the governor of the central bank. So, when matters heat up, few care what the central bank is saying. If NNPC is saying that it cannot find buyers for oil even at $32 per barrel, there are limited things CBN can do because it has failed, over decades, along with other agencies to architect with the government, and diversify the economy. Managing the revenue from oil proceeds in foreign banks like JP Morgan, Citi and Goldman Sachs changes nothing if those bank accounts are not getting new inflows from oil sales.
In a statement in Abuja, Group Managing Director of the NNPC, Mallam Mele Kyari, who was speaking at the Central Bank of Nigeria, CBN, Round Table discussion, also warned of serious economic challenges as a result of the falling crude oil price.
He called on government at all levels, captains of Industries and the organized private sectors to brace up for the new low regime of global crude oil prices, while he added that realistic estimates must be made to reflect the current realities of the crude oil market.
Despite the global downturn, Kyari, however, stated that the NNPC was working round the clock to increase the countries daily crude oil output to three million barrels per day and shore up the country’s crude oil reserves to 40 billion barrels.