The senator representing Ondo South, Jimoh Ibrahim, has stated that the rise in oil prices could strengthen Nigeria’s economy.
He said this during an appearance on Channels Television on Friday while assessing the implications of the Middle East crisis on the country’s economy.
Asked how the conflict could affect Nigeria in terms of grains and energy, Ibrahim explained that rising oil prices could strengthen Nigeria’s economy.
“You will have more money; that’s one thing. It will reduce borrowing. The price of the dollar may initially rise, but when you sell more oil at higher prices, you get more dollars.
“That allows the central bank to intervene in the black market and stabilise rates, making dollars more available. Once that happens, the macroeconomic effect will improve because price stability promotes a sustainable economy arising from cash inflows, not borrowed funds,” Ibrahim said.
The businessman also highlighted the progress in Nigeria’s debt management under President Bola Tinubu’s administration:
“Right now, revenue-to-debt servicing is 68%. Kudos to Bola Tinubu. Before he came, a 96% GDP-to-revenue ratio went to debt management, meaning for every 100 naira, 96 naira went to debt. Now, you save about 38 naira in your pocket.
“With oil prices almost doubling, Nigeria has more dollars to stabilise the macroeconomic system. So, I don’t think there will be much of a problem,” he added.
Ibrahim added that the conflict could result in higher domestic costs, particularly for transportation, due to rising fuel prices.
“Nigeria is a member of the geocentric system and cannot isolate itself. The government is considering policies to cushion potential impacts. They are capable of doing this because they are receiving significant revenue from crude oil,” the lawmaker said.
