Nigeria’s Okonjo-Iweala Says Bank Rate Cut Would Boost EconomyMaram Mazen
Nigeria’s economy would benefit from interest-rate easing even though it’s likely that the central bank will keep the key indicator unchanged tomorrow, Finance Minister Ngozi Okonjo-Iweala said.
“We would be very grateful if we saw an easing of the interest rate, a little bit, in order to also help more economic activity,” she said, speaking to Standard Chartered Plc on a conference call from Abuja, the capital, today. “Knowing the central bank governor and perhaps the tone and trend of the Monetary Policy Committee, I’m sure that they may end up maintaining tight monetary stance.”
The MPC, led by Governor Lamido Sanusi, will hold the policy rate at a record high 12 percent for a 10th consecutive meeting, according to all 11 economists surveyed by Bloomberg. The bank held the rate last year to curb price pressures and support the naira.
The excess crude account, in which the country saves revenue above the benchmark oil price set in the budget, is now down to about $5 billion, Okonjo-Iweala told reporters after the call. The account had $9.2 billion in Janaury. The West African country, Africa’s largest oil producer, will probably continue to draw from the account in the next two or three months to finance a shortfall in oil production, she said.
“We do have a quantity shock” at the same time that oil prices have started to decline, she said. Security is expected to improve in the oil-producing Niger River delta in the next three months, the minister said.
Crude production fell to 1.81 million barrels a day in March, the lowest since September 2009, according to data compiled by Bloomberg. Oil theft in the delta caused production to decline to an average 2.2 million barrels a day in the first quarter, according to figures released by state-owned Nigerian National Petroleum Corp. on April 17.
This year’s budget is based on a production forecast of 2.53 million barrels a day.