2020 budget to reflect revenues and expenditure for Nigeria’s GOEs

Nigeria is projecting economic growth at 2.93 per cent for 2020, with a larger budget of 10.07 trillion naira, while the crude oil benchmark has been slashed to $55 per barrel of oil. The draft copy of the Medium Term Fiscal Framework highlights key assumptions and risks facing the Nigerian economy. Winston Osuchukwu, Co-founder and Managing Partner at Trans-Sahara Investment (TSIC), shared his insights on the document during a recent interview on CNBC Africa. Osuchukwu emphasized the impact of the African Continental Free Trade Area (AfCFTA) agreement on Nigeria's business environment. He pointed out that the agreement opens up opportunities for trade with neighboring countries, potentially diverting investments away from Nigeria. With Nigeria facing challenges in ease of doing business, the rise of Ethiopia as a competitive market poses a threat to Nigeria's status as a regional economic powerhouse. Discussing the oil sector projections, Osuchukwu supported the downward revision of the oil benchmark price to $55 per barrel. He advocated for a gradual reduction of the benchmark to eventually reach zero, encouraging diversification of the economy. Addressing issues in the Niger Delta region and implementing governance measures were highlighted as crucial steps to enhance oil production and economic growth. The interview also touched upon the need for concrete strategies to achieve fiscal sustainability and macroeconomic objectives. Osuchukwu stressed the importance of setting clear targets and timelines for economic diversification. He proposed a legislative approach to enforce economic diversification by gradually reducing dependence on oil revenue. Regarding recent developments in the oil market, Osuchukwu cautioned against over-reliance on short-term gains. He urged policymakers to focus on long-term economic planning and prepare for potential volatility in oil prices. The interview highlighted the importance of considering geopolitical factors, such as US-Iran relations, in assessing the stability of oil markets. In conclusion, Osuchukwu acknowledged the significant fiscal challenges facing Nigeria in the medium term. He underscored the importance of taking bold and urgent actions to address these challenges. The draft document's admission of Nigeria's fiscal issues was seen as a step towards transparency and accountability in economic planning. As Nigeria navigates its economic landscape, stakeholders are called upon to align policies with long-term sustainability goals. The interview with Osuchukwu provides valuable insights into the complexities of Nigeria's economic outlook and the strategies needed to overcome fiscal challenges.