 Ladies and gentlemen, I'm going to be talking about dealing with the price oil shock in Nigeria's country. As you know, of course, Nigeria is one of the greatest countries in the world exporting oil. Recently I've had a lot of problems and I'm going to be talking about the problems. My paper actually talks about various things in terms of the macroeconomic effects of the price oil shock, how we'll be managing revenue from oil, transparency from oil, issues about debt and all of that. But I'm not going to go into all of that. I'm going to try to zero in what I'm going to talk about by providing a very simple outline, which where in first place I'll talk about stylized fats and I'll talk about the importance of oil in the Nigerian economy and I'm going to talk about the growth of the Nigerian economy itself. And then I was then zero on the wake-up call of 2014, which is very significant for us, and then I'll talk about the policy response to the price shock, then the macroeconomic effects of the oil price shock, and lastly I will talk about trying to diversify the economy, the issues and concerns that are currently being faced in Nigeria. Well, let me start with the stylized fats. I'd like to state very clearly that Nigeria is full of paradoxes. A country in which the majority of the citizens are actually suffering in the midst of plenty. We have plenty of money before, at least that's how we thought, but apparently the money had not been adequately used to reflect what should be done in terms of priorities. Secondly, the current state of Nigeria's economy is the resultant effect of external and internal factors. The internal factors of course are zeroing. For the worst economic situation can be aggregated, all that what I'll call macroeconomic policy errors. And these errors of the past and also the recent policy makers, mainly bad mix of macroeconomic policy, traditional policies, lack of vision, misconception on the stability of oil revenue, thinking that the windfall which you get from oil revenue is really permanent income, corruption, and of course poor governance. A lot of people have put a lot of emphasis on corruption and poor governance. Indeed, somebody I launched today asked me, how are we dealing with corruption in Nigeria? How is Buhari dealing with corruption? Of course, this does not say that Nigeria is the only corrupt country in the world. There are varying degrees of corruption all around the world. Thirdly, the impact of the sharp and prolonged decline in commodity prices have been most severe and had been estimated by Vandalisim and Gangalisim in the world producing Nigel Delta, with the menace being created by what we call the Nigel Delta Avengers, attacking oil pipelines and causing a lot of disruption. For being the largest school-level producer in the region and certainly heavily dependent on oil revenue, Nigeria has started recording weak economic growth from 2015 to now. And that Nigeria is now in recession is no longer in doubt because we have steadily recorded, you know, from 2016, two quarters of negative growth rate. I'll talk about that when I get to that. Well, the adverse impact of the lower commodity prices of course were compared among other factors. By weaker export demand, the declining crude oil demand from India, China, and U.S. These are Nigeria's top export destinations for crude oil. Later, declining Nigeria's export performance in the first quarter of 2016, in the first half of 2016, for example, India and the United States slashed crude oil imports by 43 and 53 percent, respectively. This is significant for us because with the Vandalism going on, with the reduction in all these places, of course it meant less revenue, which we use in the federation account for distribution to various states. Five, the military conditions such as policy uncertainty and security conditions have estimated economic woes that Nigeria faced today. Such uncertainty, of course, are many and I'll mention some of them. Certainly, I'm going to mention the Boko Haramiju shortly. Nigeria's crude oil production, constantly lived greatly by Vandalism attacks on oil and gas facilities and pipelines. All these have had negative impacts on Nigeria's foreign exchange earnings and also on the revenue prospects for the country. The bottom line is that the present crisis shows the need for a deep rethink of Nigeria development strategy to try to diversify the economy. Develop new sources of sustainable, inclusive growth and zero tolerance for corruption. That is key and that's why I call it the bottom line for whatever it is we're going to do. Now, the importance of oil. Oil is very important to Nigerian economy and has been since oil was discovered and exported. In fact, since the oil came, Nigeria focused mainly on oil production and ignored other sources of revenue. We have been the problem that we currently facing. In order to get the economy's exposure to oil or its export dependency, one can look at oil revenue, oil exports as a share of total exports and oil as percentage of government budget through revenue and oil as percentage of GDP. Of course, what is important to us is oil, the total revenue, the percentage of oil in total exports as well as the contribution of oil to government revenue. Over time, of course, this has been very important for us because basically in terms of contribution, oil contributes between 75 to 85 percent of government revenue over time and that is it and it is very important. So of all the three criteria, the share of oil in total exports and share of oil in total government revenue stand out to be very, very important. Indeed, according to the National Bureau of Statistics, National Statistics, we call that oil revenue contribution more than 70 percent of total government revenue. In fact, the estimate most cases are between 75 and 85 percent depending on the time. So in the period between 2005 to 2014, real GDP growth in Nigeria was about 6.3 percent, making Nigeria one of the fastest growing countries in the world. But of course, the growth notwithstanding, Nigeria was able to, Nigeria was not able to create jobs for the teaming graduates from various tertiary institutions. The level of poverty had remained very high. Poverty, which was about 54 percent in 2004, rose to 69 percent in 2010. The social indicators have been very poor on employment rising, ADI country index Nigeria is 152 over 187 countries. The beginning coefficient, of course, which was 0.42 percent in 2004, rose to 45 percent in 2010. And there is no evidence that it has improved six years later. So we're still battling with the problem of inequality. Indeed, there is nothing at all. A significant share of Nigeria's wealth in the pockets of very few people, the big shots were taken care of many times. Well, the wake up call of 2014 is very significant because year 2014 was a year of contrast. In the first half of 2014, the oil price, of course, as you know, picked up at about $112 per barrel. And it was a year in which Nigeria based its GDP, making Nigeria the largest economy in Africa, between South Africa. The South Africans are still fighting over that. I think they don't like it. But that was then 20, and that was what it filled in 2014. Now in 20, in the same year, in the second half of 2014, the problem then started. The global commodity prices slumped. That was global liquidity volatility, both of which caused both export income and capital flows to Dwendu. By the end of the year, the price of oil had fallen to about $48 per barrel. Since actually the third quarter of 2014, Nigeria had had to deal with number one, this drastic drop, 70% drop in oil price. And similarly, dealing with the global slowdown and geopolitical tensions along critical trading routes in the world. So at the beginning of 2015, on certainty about the oil price, of course, dominated. There was a great challenge to fiscal policy. And because 2015 was the year of election, even 18 at all, politicians are very good at talking with two sides of their mouth. Oh, it is true. Oh, it is not true. And there was a lot of denial trying to really underestimate the proportion of the difficulty which Nigeria was facing at that time. And indeed, the uncertainty was complicated by the menace of the militant Islamic group, the Boko Haram insurgency. Which grew very active and deadly in its attacks on state and individuals, including the abduction of Shibu girls, which of course gained international attention. And as a result of the harassment and menace created by this group, indeed, elections had to be delayed for some time. Finally, elections were held, and then the APC under Buhari won the election. But then it took significant time before the administration was able to settle down to the basic issues of governance and try to address the global problem which Nigeria was facing. Therefore, this hesitation limited the scope for timely and necessary response to the crisis at hand. And at the same time, it helped to elongate the inside lack of policy. Now, the policy response to the crisis, how did we respond to the crisis? Basically, by the utilization of monetary and fiscal policy, and more monetary policy actually, the CBN responded right away in 2014 by tightening monetary policy. But as a result of the pressure that was on the exchange rate, the CBN went ahead to impose restrictions on commercial foreign exchange trading, closed the official foreign exchange auction window, and at the same time channeled these transactions to the inter-bank market. At first, the CBN tried to depreciate the Naira from $155 to the dollar, then subsequently, of course, to $168 to the dollar. And of course, at the last time, it was depreciated to $198 Naira to the dollar. Of course, this is not helped us by any chance. It continued to create a lot of hardship to a lot of people, in particular those in the profit sector, the manufacturing sector, the airlines and so on. So, why this maintaining this rate? It provided a limited for its needs to various sectors of the economy for the importation of raw materials. Naira is highly dependent on the importation of raw materials. Also, for petroleum products importation, which it was doing at that time, school fees for those whose children were abroad, mostly the children of the elite like Peter and others, we provided for them so that they can pay the school fees. And of course, my sure that also credit had also to be issued to very big manufacturers who did it. They were limited, but again, their interest had to be satisfied. As it turned out, of course, the Montreal Policy Committee at the same time increased interest rates, cash reserve liquidity ratio. And at its meeting of May 24, 2016, the Montreal Policy Committee realizing the weakened macroeconomic environment as shown by various indicators in the economy, rising inflation, contraction of real output and rising unemployment, voted to maintain this 20% interest rate, cash ratio of 22.5%, and of course, the liquidity ratio at that percent. Well, things were very uneasy. And it continued at that time. And the major question was, should we really allow the exchange rate to be fixed at $190 to the dollar? Finally, finally, the central bank, I guess in agreement or coalition or whatever with the power that be, decided on June 15, 2016 to go for a managed float exchange rate system. So it went ahead and announced a new market structure, market structure, where the exchange rate was allowed to, oh, yeah, I see the friendship now, five minutes. The fiscal policies, of course, were trying to adjust the budget and making sure, you know, so I have to go quickly. Now, the macroeconomic effects, what are the major macroeconomics of all of this? Let me mention some of them. The first was, of course, the foreign exchange reserves from $42.8 billion to 26.7% as of June 2016. It had gone down further a little bit. At the same time, the money that was going to the central bank had also fallen. It was falling, common revenue, of course, falling capital flows. Now, the slower GDP growth rate, of course, in the first half of 2015, real GDP, which was 3.12%. But then it started growing down. And by the time we get to the second quarter of 2016, GDP had declined again by 2.06 as opposed to what it was in the first quarter, which was 3.17%, 0.36% in the first quarter of 2016. Inflation continued to skyrocket. Of course, there was problem in payments of salaries and the movement of states under the federal structure that we do have, as a distributive pool from which states were given allocation every month. Of course, that fell, and with the fall in that, it was very difficult to pay salaries. And of course, a lot of the states were more interested in cake sharing, which is going there to collect there. There was theft and vandalization, in particular, more prominence in 2015. As a result of all this, it is not surprising that there is rise in non-performing loans by banks, because banks, of course, give customers loans and, of course, to pay back, they have to be receiving salaries, and they were not receiving salaries. Some airlines also had to leave the country because of problems. One of them was United States, and United, and the Iberia, of course, the Spanish airline had to leave. Now, the major issue is about diversification of Nigerian base, trying to look for more money. I'll order from, instead of getting it from oil, attempts are being made now to look at the various sectors, which is mainly agriculture. There is evident, or co-abundant evidence, that there is need to diversify the economy and try to increase the resource base of the economy. But, you know, I think that in order to do that, we need to take a critical look at the size of government at all levels, and we need to take a look, and I said the remunerations of the political class, which is out of alignment with what is happening in the economy, the senators, and so on, the national assembly. And also, there is need for us to create limited institutions that work. I think creating overlapping myriads of institutions creates ways and avenues for bribery and corruption, and we should try to eliminate that. Now, I think there are a number of things that we need to look at. As I said, agriculture is primary, but it's going to be value-added agriculture, and work and ask the question, what happened to the cocoa and groundnut pyramids of the earlier years? Indeed, Malaysia came to Nigeria to borrow the techniques of producing palm produce. Now, as you know, you know the position of Malaya today and the world today in palm produce. Whereas, Nigeria now is not doing anything. So now, Nigeria is trying to go back to those old times and try to, you know, to make sure that revenues on agriculture is improved, and at the same time, that we can feed ourselves. People are considering the introduction of that and looking at oil taxes, looking at taxes, but again, Nigeria is not noted for that because there is low tax compliance. In fact, when you look at the tax effort, tax of GDP, Nigeria is one of the lowest in Africa, and we're trying to look at that to see how we can bring that as somewhere we get more money. But again, the issue is not really getting more money. We have to worry about people who steal money, people who stole our money are brought by looters. We have to worry about capital flight, you know, from my work. Peter did not say something. This time around, I'm not talking about capital flight or globalization and so on. On FDI, which is unusual, I'm talking about a specific macro issue. But again, Nigeria is noted, it's one of the countries in the world that the highest, has a very high ratio of capital flight out there. But I think there is need for Nigeria to try to develop talents and professionalism. And specifically, I'm talking in the area of nollywood. Nollywood, some of you watch some of the entertainment industry, many of you will know. When you look at holywood and bollywood and compared to nollywood, you see Nigeria is doing very well. It's doing very, very well. And I think we should do something to make sure that no. But there is need for to develop right additional changes for efficiency in government spending and service delivery. And of course, the overall conduct should be zero tolerance for corruption. Well, I have to please Peter all the time and be my friend. So I thank you all for listening to me.