The fall in oil price has reduced the monthly allocation to the three tiers of government by n73.9bn.
The crude oil, which is the major component of the earnings which the tiers of government derive their allocation from has dropped in price from $77.5m in November to $52.2m in December last year.
Despite this development and what seems to be a steady depletion of the country’s foreign reserve, the federal government has insisted that Nigeria is not broke. As at January, 2015, the foreign savings had dropped to $34.5bn from $43.24bn in less than a year. Early February, CBN’s reported a further loss of $1bn in 12 days.
Minister of state for finance, Bashir Yuguda told newsmen after the meeting of the Federation Account Allocation Committee in Abuja, that the continuous fall of the crude oil price has negatively affected the gross revenue of the federation account.
Interbank exchange rate today, Wednesday, February 25, is N200.55. CBN says it takes its effort to defend the currency to prevent a disastrous fall.
Today, crude oil is selling for $49.6 per barrel and with a continuous decline in the global market price of oil, how long more can the CBN defend the naira before it further devalues the naira.