TheCable

Ibe Kachikwu, state minister for petroleum resources, says Nigeria is not the only country struggling to fund its budget, adding that the “big players” are facing the same predicament.

Speaking in Vienna Austria, after the historic Organisation of Petroleum Exporting Countries (OPEC) meeting, Kachikwu said a lot of oil-producing countries were struggling with funding their budgets.

“It’s the year’s end, budgets are being put together. A lot of us are struggling to fund our budgets. It is not just a Nigerian issue; even the big players are struggling,” he told CNBC.

He said the oil producers had made some progress in pushing oil prices up, but the progress had been “crawling”.

Kachikwu added that uncertainties had been affecting markets and driving volatility, requiring OPEC to step in and manage.

The minister said if OPEC did not step in, “everybody would have to go back to their corridors and let market forces take its course”.

“We all know that the balancing will not take place till about second to third quarter of 2018, which is two budgetary cycles away, and I don’t know how many countries would be surviving at that time; it was imperative that something was done.”

He said if left to market forces alone, the kind of balancing needed by OPEC and its members would not be seen anytime soon.

Since the oil plunge started in 2014, Nigeria has seen a drastic decline in its revenues, and a crash in the flow of foreign exchange.

In 2016, the case became dire, as the nation found it increasingly difficult to fund its expansionary budget, which was aimed at stimulating growth in the economy.

The country plunged into a recession, and is seeking to seize the 2016 and 2017 budget to get out of it. However, funding those budgets has remained a challenge.

Kachikwu has sought deals with India and China to get necessary funds for implementing Nigeria’s budget.