The minister of finance and coordinating minister of the economy, Wale Edun has said Nigeria needs to raise oil production in order to address foreign exchange (FX) supply challenges.
He spoke to newsmen on Tuesday at the G24 news conference held on the sidelines of International Monetary Fund (IMF)/ World Bank annual meetings in Washington DC.
Nigeria, as an oil-dependent economy, counts on the oil and gas sector for its FX receipts and strengthening its external reserves.
But, owing to infrastructural challenges and crude pillage, the sector has been underperforming — contributing only 5.7 percent to the total real gross domestic product (GDP) in Q2 2024.
On the 14th of October, the Organisation of Petroleum Exporting Countries (OPEC) disclosed that Nigeria’s average daily crude oil production declined to 1.32 million barrels per day (bpd) in September 2024.
“…regards to Nigeria, the key about the foreign exchange market really is supply. Of course, as you know, we are an oil-producing country. We just need to get our oil production up [and] that will deal with the issue of foreign exchange supply and pressure on foreign exchange every time there are large flows,” he said.
“In terms of single digit inflation, the rich countries, they have effectively defeated inflation, and that’s why their interest rates can come down.”
The minister mentioned that the governor of the central bank in Nigeria, in the context of high inflation, is continuing with monetary tightening, which is the orthodoxy of the present day.
Commenting on major lessons learnt from implementing structural programmes in Nigeria, Edun said what is essential — because the benefits are over the longer term and the costs are front-loaded — is the social safety net that will help the poor and the vulnerable cope with the upfront costs, with an increase in their cost of living sufficiently planned for and dealt with.
“There needs to be certain poverty alleviation initiatives,” he said.
“Link to that focus on helping the poor and most vulnerable people is communication. I think one of the critical things in carrying out these macroeconomic reforms, is communicating what is being done, what is to be expected and the timing of the various activities and then communicating what actually has been done.”
The minister added that if a programme is to give direct benefits, it ought to be published.
Edun also said there should be a dashboard that people can follow, “thereby engendering and building public trust”.