Nigeria Is In Serious Cash Crisis, Says Okonjo-Iweala
Nigeria’s former Finance Minister Ngozi Okonjo-Iweala said her successor will face a “difficult” year because of plunging oil revenues and the economy needs expert management to weather the storm.
“We have a serious situation with a cash crunch,” she said in an interview with Bloomberg in Cape Town, South Africa at the World Economic Forum on Africa.
“But fundamentally, the economy is strong. If we can get through the cash crunch, manage the way through, build on some of the assets we have, by next year, things will be better.”
Nigeria is struggling in the face of a 40 per cent slump in crude prices in the second half of last year, which forced authorities to scale back budgeted spending and devalue the naira as foreign-currency reserves fell. The government relies on oil for about 70 percent of its income.
The next finance minister needs to focus on “a strong policy, the fiscal consolidation path that we have and looking toward diversification of revenue resources,” Okonjo-Iweala said.
President Muhammadu Buhari, who was sworn into office last week, has yet to appoint his cabinet. Okonjo-Iweala, a former managing director of the World Bank, was finance minister under Goodluck Jonathan from 2011.
“We are all waiting” for the new finance minister to be named, she said. “Nigeria is full of talented people so they will find someone.’
The economy is forecast by the International Monetary Fund to expand 4.8 percent this year, down from 6.3 percent in 2014. The naira has weakened 7.7 percent against the dollar this year and was trading at 198.73 on the interbank market as of 7:26 a.m. in Lagos, the commercial capital.
Okonjo-Iweala, 60, said she plans to take a break until August and will then consider her career options.
“There are so many offers,” she said. “From international to the African Union and the private sector. But I want control over myself. I’m likely to do something that gives me freedom.