Lamido Sanusi, the Central bank of Nigeria (CBN) governor, has once again reiterated the need for structural reforms to be put in place in the country.

Speaking to newsmen at the end of the just concluded Spring meeting in Washington D.C, United States, Sanusi said Nigeria will be exposing itself to major
challenges if it fails to save now that oil prices are high.

“We need to protect ourselves and hedge because of the vulnerability of our economy because of oil price,” he said. “This reinforces the need to save at the time when oil prices are high because if these dark clouds translate to fall in oil prices Nigeria is going to have major problems.

“The whole idea of saying let us look at the excess crude account, let us save now when prices are over $100, is basically not because we have a problem now. But if something happens and something may happened based on what we beginning to see, we are going to have problems in both the fiscal and the exchange rate sides.

The CBN governor said the country’s experiences when global prices of oil fell to $37 dollars should serve as a lesson for all.

“We have seen oil fall to $37 per barrel and we all know what the country went through,” he said. “We will continue engaging until all the tiers of government agree that we have to safe.

"There will be a very bad day and a lot of gnashing of teeth if the oil price crashes and we haven't saved a thing. Our major concern is a major decline in the price of oil or (domestic) output would lead to a massive depreciation of the currency, a collapse in reserves and a huge growth in deficits and some of the states outside of the oil-producing region might find actually themselves in a situation where are not able to pay salaries," he said.

"I am trained to think in terms of 'what if' and that's the mindset I bring to my job. What happens if oil prices go to $50 a barrel? It's happened before."

http://www.businessdayonline.com/NG/index.php/banking-a-finance/36357-nigeria-must-protect-itself-now-cbn

This is exactly why I support the idea of the Sovereign Wealth Fund, though the Federal Government can only save its own share of the oil revenues. State governments must be encouraged (or pressured) to do the same. We cannot afford to repeat the mistakes of 2008.

Sanusi - Your so full off sh.it and you sound more like a 'Zionist' daily.

@Nwa,

Don't u think this chart u just put only confirms the fact that oil prices are so volatile?

Nwa_Nimo: Sanusi - Your so full off sh.it and you sound more like a 'Zionist' daily.

Another display of idiocy.